US suspends tariffs on UK goods in trade dispute

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The UK and US have agreed a new joint approach to the longstanding trade conflict over aerospace tariffs.

The United States will temporarily suspend all retaliatory tariffs on direct exports from the UK to the US resulting from the Airbus dispute for four months, in an effort to reach a negotiated solution to the 16- year long dispute. This measure will be backdated to 4th March.

In 2018, the year before the tariffs were imposed, the US imported around £550m of goods affected by these measures from the UK. The tariff suspension will help protect jobs on both sides of the Atlantic in industries who have been targeted by these unfair tariffs, particularly Scotch whisky. Scotch was the UK’s largest food and drink export in 2020, and exports of single malt Irish and Scotch whiskies to the US were worth around £340m in 2018.

This follows the UK’s decision to suspend Boeing tariffs against the US from January, a show of good faith which ensured the UK was not hit by further tariffs and allowed both countries to work on ending the dispute and focus on deepening our future trading relationship.

The Prime Minister Boris Johnson said: “From Scotch Whisky distillers to Stilton-makers, businesses across the UK will benefit from the US decision today to suspend tariffs in this dispute. It shows what the UK can do as an independent trading nation, striking deals that back our businesses and support free and fair trade. I now look forward to strengthening the UK-US relationship, as we drive economic growth and build back better together.”

The Department for International Trade has announced that it will continue to engage with the US to agree a fair settlement to the dispute, that removes punitive tariffs and works for the whole of the UK.

Industry reaction

Tony Danker, CBI Director-General, said: “News of a short-term agreement to suspend US retaliatory tariffs on UK exports, from scotch whisky to textiles, is extremely welcome. The duties on these goods were harming business and consumers on both sides of the Atlantic. This positive step must now lay the foundations for talks at pace to resolve the dispute once and for all. This dispute is lose-lose for all involved at a time when business is suffering from the pandemic, global trade and investment is crucial for economic recovery.”

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