The British Government announced on Thursday an agreement with the United States to temporarily suspend the tariffs imposed on a series of products, such as Scotch whiskey or Stilton cheese, within the framework of a commercial dispute between the American aircraft manufacturers Boeing and the consortium. European Airbus.
“From Scotch whiskey distilleries to Stilton cheese producers, the US decision to suspend tariffs on certain British exports will benefit our businesses across the UK,” Prime Minister Boris Johnson congratulated on Twitter. Airbus employs more than 13,500 people at 25 British plants and generates 100,000 supplier jobs in the country.
The agreement, which for the moment will have a validity of four months, will thus suspend the 25% tariffs imposed by Washington on Scotch whiskey – whose exports to the US fell by 30% last year -, cashmere, the appellation of origin cited and others British products. It also foresees a “de-escalation” in the commercial conflict between the two aircraft manufacturers to finally solve it definitively. “This will give us time to close the dispute with a balanced settlement while we begin to respond seriously to the challenges posed by the incorporation of players into the civil aviation market from countries without free markets, such as China,” explains the joint announcement of the announcement. .
The European consortium Airbus and its American competitor Boeing, and by delegation the European Union – of which the United Kingdom was part at the time – and the United States, respectively, have faced the World Trade Organization (WTO) since October 2004 over the public aid to both groups, considered illegal. It is the longest and most complicated trade dispute that the WTO deals with.
In October 2019, the WTO authorized the United States to impose tariffs on nearly $ 7.5 billion of imported European goods and services each year, the largest penalty ever imposed by the organization, in retaliation for continued European subsidies for Airbus manufacturing. . The 25% rate is the one applied to Spanish olive oil, a tax so punitive that it has practically lost the US market, the most important in volume of demand (320,000 tons) and prices. That same month, the EU appealed the WTO ruling against him.
Last August, the United States confirmed the tariffs on Spanish products and increased the punishment to others from France and Germany.
Since then, Washington has imposed that 25% tariff on certain products imported from the EU, and 15% on Airbus planes. The bilateral agreement also takes pressure off the US aeronautical giant, which has been suffering from breakdowns and reputational crises for months.
The effective exit of the United Kingdom from the EU, on January 1, has led to rapprochement. In December London announced as a gesture of goodwill that it was withdrawing tariffs on American products, in the hope of obtaining a reciprocity that it has now achieved, albeit temporarily. The temporary suspension of tariffs is an independent chapter in the post-Brexit negotiations between the US and the United Kingdom, but it represents a positive signal on the progress of the dialogue and confirms the consideration of the US as a priority trading partner after the door slammed from London to Brussels and the consequent closure of the Community internal market.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.