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U.S. suspends tariffs on UK goods to resolve aircraft dispute

UPDATED: Thu., March 4, 2021

Scotch whisky is lined up for tasting at the Glenfiddich distillery in the Speyside region of Scotland on June 28, 2016.  (Associated Press)
Scotch whisky is lined up for tasting at the Glenfiddich distillery in the Speyside region of Scotland on June 28, 2016. (Associated Press)
Associated Press

Associated Press

LONDON – The U.S. agreed Thursday to suspend millions of dollars’ worth of tariffs on U.K. exports, including Scotch whisky, as part of an effort to resolve a long-running trans-Atlantic trade dispute over aerospace subsidies.

The U.S. government will suspend tariffs for four months on a range of goods, the two countries said in a joint statement, in the latest move to de-escalate trade tensions centered around aid for Boeing and Airbus.

Former U.S. President Donald Trump’s administration had slapped tariffs in 2019 on $7.5 billion worth of European goods in retaliation for state support given to Airbus.

Britain was targeted along with the other three stakeholders in Airbus – Spain, France and Germany – for more tariffs than other countries.

The EU retaliated with tariffs on up to $4 billion of U.S. goods over subsidies to Boeing, but the U.K. offered an olive branch to the U.S. by announcing it would suspend tariffs from January, an offer that President Joe Biden’s administration has moved to reciprocate.

“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 nonmarket economies, such as China,” the joint statement said.

Distillers of Scotch whisky – the U.K.’s largest food and drink export last year – cheered the news that the 25% tariff would be cut to zero.

Scotch exports to the U.S. fell by a third since the tariffs were imposed 16 months earlier, costing the industry more than half a billion pounds, the Scotch Whisky Association said.

“Suspending these tariffs – stemming from a transatlantic trade dispute that had nothing to do with us – and a return to tariff-free trade with the U.S. means livelihoods and communities across Scotland will be protected,” said trade group CEO, Karen Betts.

Scottish cashmere producers, pig farmers, and Stilton cheese makers will also benefit from the suspension of tariffs, the U.K. Department for International Trade said.

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