Brexit win as US suspends tariffs on British exports

Alan Tovey
·3 min read
Scotch
Scotch

Britain has claimed a “Brexit bonus” after the US agreed to suspend tariffs on UK goods imposed in the fallout from a long-running battle between America and the EU over illegal state aid for aircraft makers.

Exports to the US of British goods such as Scotch whisky and clotted cream had been hit with levies of 25pc because of the dispute over subsidies and tax breaks offered to Airbus and Boeing.

Products sold to America were affected by the World Trade Organisation-sanctioned tariffs announced two years ago, as former President Donald Trump sought to protect domestic manufacturers such as Boeing.

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

To offset the harm, both the EU and US were allowed to slap tariffs totalling $12bn on a wide range of imports and not those in the aerospace sector alone.

The EU announced it was imposing the tariffs in November 2019 having been 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 and which starts on March 8 was a result of “our clear show of good faith”.

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

“This is Global Britain in action: securing new opportunities as a newly nimble nation,” Ms Truss said.

“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.”

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."

Prior to the introduction of the tariffs, the US imported £550m of goods a year from the UK which were hit by the levies.

One of the biggest beneficiaries is the Scottish whisky industry, which provides or supports 50,000 jobs and counts on the US as its largest market, worth more than £300m a year in exports.

Other UK sectors helped by suspension of tariffs include cheese producers, gin distillers, and clothing companies that sell upmarket products to Americans.

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 the nascent Chinese aviation industry.

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.

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