Brexit win as US suspends tariffs on British exports

Alan Tovey
·3 min read
Scotch
Scotch

America has agreed to suspend punitive tariffs on a host of UK goods including Scotch whisky, cashmere clothes and clotted cream in a victory for post-Brexit Britain, after a truce was agreed over illegal state aid for aircraft makers.

The deal means that levies of 25pc will be lifted on £550m of exports to the US. The duties were imposed two years ago as part of a long-running row about subsidies and tax breaks offered to Airbus and Boeing.

One of the biggest beneficiaries is the Scottish whisky industry, which supports 50,000 jobs and counts the US as its largest market.

Other industries helped include producers of cheeses such as stilton, gin distillers, and clothing companies that sell upmarket products to Americans.

British Trade Secretary Liz Truss touted the deal as a new sign of transatlantic co-operation now the country has left the European Union.

She said: “This is Global Britain in action: securing new opportunities as a newly nimble nation.

“This breakthrough shows that we can do more under our values-driven approach to stand up for British industry than was possible as part of the EU. We are sending a powerful signal that the best way forward for us all lies in free and fair trade."

Products sold to America were hit by World Trade Organisation (WTO)-sanctioned tariffs when former President Donald Trump sought to protect domestic manufacturers such as Boeing.

The tariffs were imposed after the WTO ruled that both Airbus and Boeing had been given state support that broke international rules - the culmination of a 16-year feud between the two firms fought by proxy through their governments.

To offset the harm, both the EU and US were allowed to slap charges totalling $12bn (£8.6bn) on a wide range of imports and not those in the aerospace industry alone.

The EU announced it was imposing the tariffs in November 2019 after it was given the green light by the WTO.

But in a surprise move in January, the UK dropped import levies on goods from the US - something ministers said was only possible because Britain had left the EU.

The decision was part of a campaign by the UK to secure a trade deal with the US and improve relations with the new administration of President Joe Biden after they deteriorated under Mr Trump.

International Trade Secretary Liz Truss said the four-month suspension of tariffs on goods sold to the US, which starts on March 8, was a result of “our clear show of good faith”.

She added that Britain had "brought the US back to the negotiating table and allowed us to make proposals for a resolution”.

Liz Truss
Liz Truss

Prime Minister Boris Johnson said: "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."

Airbus has repeatedly said it wants to find a negotiated settlement to the row with Boeing, a move that would protect the aerospace duopoly from rivals gaining power in China.

There are concerns that if the world’s two biggest aircraft manufacturers cannot agree a deal where they abide by WTO rules, this would pave the way for Beijing to pump state aid into its aerospace industry - making it harder for the established players to compete.