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The
U.S. administration under former president Donald Trump had
imposed tariffs on an array of EU food, wine and spirits,
including on Scotch whisky, which the industry says had put its
future at risk.
Britain is party to the dispute as a former member of the
European Union. Airbus builds wings and other parts in Britain,
but assembles its commercial aircraft in the EU.
"The United Kingdom and the United States are undertaking a
four-month tariff suspension to ease the burden on industry and
take a bold, joint step towards resolving the longest running
disputes at the World Trade Organization," a joint statement
said.
"This will allow time to focus on negotiating a balanced
settlement to the disputes, and begin seriously addressing the
challenges posed by new entrants to the civil aviation market
from non-market economies, such as China."
The multi-billion dollar tit-for-tat tariff battle between the
United States, the European Union and Britain, which left the EU
at the end of 2020, relates to a long-running row over state
subsidies for planemakers Airbus and Boeing.
Airbus spokesman Clay McConnell welcomed the suspension of what
he called "lose-lose tariffs" and said the company supports all
efforts to reach an agreement.
No comment was immediately available from Boeing.
The agreement to lift tariffs is temporary and applies only to
UK goods. U.S. tariffs will continue to apply to EU goods,
according to a U.S. administration official.
A British official described that as a "real win" which
justified a British decision to diverge from EU policy.
In December, Britain said it would use its new-found freedom
outside the EU to diverge from the bloc's common trade policy
deciding to unilaterally suspend the tariffs in hope of reaching
an agreement with the Trump administration before it left
office.
Talks between Britain and the United States on a separate deal
focused on the aircraft subsidies issue had been progressing but
were abruptly ended in January, according to a source familiar
with the matter.
"I am delighted to say that our American allies – under their
new President and his hard-working staff at the U.S. Trade
Representative - have embraced our move to seek a fair
settlement," she said.
U.S. President Joe Biden's top trade nominee, Katherine Tai, is
headed to confirmation by the full Senate next week.
She told the Senate Finance Committee last month that Washington
had completed four rounds of negotiations with Britain since
announcing the start of talks. She said she would make it a
priority to resolve the long-running dispute over aircraft
subsidies with the EU and Britain.
The Scotch Whisky Association said it welcomed the news.
"The tariff on single malt Scotch whisky exports to the U.S. has
been doing real damage to Scotch whisky in the 16 months it has
been in place, with exports to the U.S. falling by 35%, costing
companies over half a billion pounds," Scotch Whisky Association
CEO Karen Betts said.
The Distilled Spirits Council of the United States welcomed the
decision, calling it a hopeful sign that an agreement was in
sight, but said it was disappointed that British tariffs on U.S.
whiskey relating to a separate dispute over steel were still
being applied.
Tai, asked if she would prioritise an agreement with Britain,
told the committee in written responses to questions released
this week that Britain was "an important trading partner and
ally".
(Reporting by William James in London Aakriti Bhalla in
Bengaluru and Andrea Shalal in Washington; editing by Paul
Sandle and Jason Neely)
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