The UK has decided not to impose tariffs on US goods over subsidies for aerospace firms, in order to reach a post-Brexit trade deal.
The UK will not dropping the tariffs placed by the European Union last November on US goods over alleged illegal subsidies for Boeing, in a bid to establish a trade deal. The UK will suspend the tariffs starting January 1, when the post-Brexit transition period ends.
Tariffs and subsidies issue
Last November, the EU decided to push thru with its plan to impose tariffs on $4 billion worth of US goods as penalty for US subsidies for Boeing.
Prior to this, the US was the first to announce plans to impose tariffs on $7.5 billion worth of exports from Europe after the World Trade Organization (WTO) ruling on the Airbus subsidies issue.
A senior US Trade Representative official announced the plan to place tariffs on the exports from Europe after the WTO ruled that the US could target goods from EU nations because they had failed to comply with an earlier ruling regarding government subsidies for Airbus.
The dispute between the European and US governments over subsidies to Airbus-manufacturer Boeing goes all the way back to 2004 when EU authorities revealed that the company had received $19 billion in unfair subsidies from federal and state governments. The US government followed suit with a similar filing that year.
The EU tariffs, which were authorized by the WTO in October, will be imposed on several US products, including tractors, ketchup and orange juice. They will go into effect on Tuesday.
Despite the move, the EU is still hoping to resolve the issue with the US.
EU Trade Commissioner Valdis Dombrovskis said Joe Biden’s election could help “reboot” talks between the two groups and claimed that the EU wanted to see both sides remove their respective tariffs.
Dombrovskis added: "Removing these tariffs is a win-win for both sides, especially with the pandemic wreaking havoc on our economies. We now have an opportunity to reboot our transatlantic co-operation and work together towards our shared goals."
UK's different approach
International Trade Secretary Liz Truss expressed that the UK is keen at finding a compromise with the US. She said: "As an independent trading nation once again, we finally have the ability to shape these tariffs."
"Ultimately, we want to de-escalate the conflict and come to a negotiated settlement so we can deepen our trading relationship with the US and draw a line under all this," Truss added.
Scotch Whisky Association chief executive Karen Betts called the UK announcement "an encouraging step".
Betts said: "It shows the UK government's determination to de-escalate the damaging transatlantic trade disputes that have seen Scotch whisky exports to the US fall by over 30% in the past year."
We now call on the US government to reciprocate by suspending the tariffs on UK goods stemming from the Airbus-Boeing dispute, so that industries in the UK and the US affected by this dispute can once again trade freely," she continued.
On the other hand, the ADS Group, which represents the UK aerospace industry, expressed its disappointment toward the UK government for making the decision without "securing some reciprocal action to resolve this dispute".
Airbus, which has a factory in the UK, said that it is still hoping to "find a negotiated settlement of this long-standing dispute to avoid lose-lose tariffs".
