The United States agreed to a four-month suspension of retaliatory tariffs on British goods such as Scotch whiskey over a long-running dispute over aircraft support, as the two sides pledged to use time to resolve the dispute.
The US administration under former President Donald Trump imposed tariffs on a range of foods, wines and spirits in the European Union, including Scotch whiskey, which the industry says has endangered his future.
Britain is a party to the dispute as a former member of the European Union. Airbus makes wings and other parts in Britain, but it assembles its commercial aircraft in the European Union.
“The United Kingdom and the United States pledge to suspend tariffs for a period of four months to ease the burden on the industry and take a bold joint step towards resolving longstanding disputes at the World Trade Organization,” a joint statement read.
“This will allow time to focus on negotiating a balanced settlement of disputes, and to begin seriously to address the challenges posed by newcomers to the civil aviation market from non-market economies, such as China.”
The battle for multi-billion dollar tariffs between the United States, the European Union and Britain, which left the European Union at the end of 2020, is related to a long-running controversy over government support for aircraft makers Airbus and Boeing.
Airbus spokesman Clay McConnell welcomed the suspension of what he called “losing tariffs” and said the company was supporting all efforts to reach an agreement.
Boeing was not immediately available for comment.
The tariff hike agreement is temporary and applies only to UK goods. US tariffs will continue to apply to EU goods, according to a US administration official.
A British official described this as a “real victory” that justified Britain’s decision to move away from European Union policy.
In December, Britain said it would use its new freedom outside of the European Union to turn away from the bloc’s common trade policy that decided to suspend tariffs unilaterally in hopes of reaching an agreement with the Trump administration before he leaves office.
A source familiar with the matter said talks between Britain and the United States on a separate deal focused on the issue of aircraft support were moving forward but ended abruptly in January.
“I am pleased to say that our American allies – in light of their new president and his diligent staff in the United States Trade Representative – have adopted our move to seek a just settlement,” she said.
Catherine Tay, the top commercial candidate for US President Joe Biden, will go to full Senate approval next week.
She told the Senate Finance Committee last month that Washington had completed four rounds of negotiations with Britain since the talks were announced. It said it would make it a priority to resolve the long-running dispute over aircraft support with the European Union and Britain.
The Scotch Whiskey Association said it welcomes the news.
“ The tariff imposed on exports of single malt Scotch whiskey to the United States caused real damage to Scotch whiskey in the 16 months that were in effect, as exports to the United States fell 35%, costing companies over half a billion pounds sterling, said the CEO Karen Bates Scotch Whiskey.
The United States Distilled Beverage Board welcomed the decision, calling it a hopeful sign that an agreement was imminent, but said it was disappointed that British tariffs on American whiskey in connection with a separate dispute over steel were still in effect.
When asked whether she would prioritize an agreement with Britain, Tye told the committee in written responses to questions released this week that Britain is “an important trading partner and ally”.