The US is set to temporarily suspend tariffs on £550 million of UK goods such as Scotch whiskey and Stilton cheese as part of the Boeing-Airbus dispute as the Biden administration looks to de-escalate one of the longest trade spats in history.
The UK suspended its levies against the US in December, choosing to break ranks from the rest of the EU, as it was uncertain whether the tariffs would be legally binding following its withdrawal from the EU on January 1.
Read more: UK halts tariffs for Boeing-Airbus dispute
The EU urged the UK to act unilaterally regarding the dispute following its withdrawal, with Biden looking to be more compromising than his predecessor when it comes to finally ending the dispute.
The affair has been ongoing since 2004 and was started following a trade disagreement over state subsidies for aerospace companies Boeing and Airbus.
In 2019, then-President Donald Trump issued a 25% tax on a range of EU imports.
The US under Biden has chosen to suspend these tariffs for four months, tax-free.
UK trade secretary Liz Trust announced the freeze could help improve transatlantic relations.
In a statement, she said: “The easier it is for Americans to buy a bottle of Macallan, Talisker or Glenmorangie, the more money those producers will have to invest in their businesses, their staff and futures.
“Today’s agreement shows that both the UK and the US are determined to work together to build back better and take our trading relationship to new heights.”
US trade representatives have said the suspension would encourage negotiations on finally ending the dispute.
The British government have said it will continue to pursue a "fair agreement" with the White House, that removes all punitive tariffs related to the dispute, which could stand to boost the UK's aerospace sector.
Prime Minister Boris Johnson said in a statement: "From Scotch whiskey distillers to stilton-makers, businesses across the UK will benefit from the US decision today to suspend tariffs in this dispute. It shows what the UK can do as an independent trading nation, striking back deals that back our business and support fair and free trade."
The US previously extended an olive branch for negotiations back in October, when officials offered to permanently suspend the tariffs on imports should Airbus repay the millions of dollars given in aid to European governments.
Read more: US offers EU a resolution for Boeing-Airbus trade war
This came a few days after the World Trade Organisation (WTO) gave the EU clearance to levy $4 billion (€3.35 billion) in tariffs on US goods.
Both Boeing and Airbus have called for an end to the dispute in the past. Both also supported the US's decision to lift the taxes.
In a statement following the announcement, Airbus said: “We welcome USTR’s decision to suspend tariffs for allowing negotiations to take place. Airbus supports all necessary actions to create a level-playing field and continues to support a negotiated settlement of this longstanding dispute to avoid lose-lose tariffs.”
In a similar statement, Boeing said: “We commend this action by the US and UK governments creating an opportunity for serious negotiations to resolve the WTO aircraft dispute. A negotiated settlement will allow the industry to move forward with a genuinely global level playing field for aviation.”
The tariffs have seen a massive decline in imports on levied goods.
The Scotch Whiskey Association (SWA) reported whiskey imports to the US have declined by 53% since the tariffs were imposed in 2019.
It welcomed the news of the tax lifts, saying: “This is fabulous news, and our industry is delighted. The tariff on Single Malt Scotch Whisky exports to the US has been doing real damage to Scotch Whisky in the sixteen months it has been in place, with exports to the US falling by 35%, costing companies over half a billion pounds.
Furthermore, sales on Stilton were down 16% throughout 2020 owing to the coronavirus pandemic, according to data from the Stilton Cheese Makers Association (SCMA).
Read more: Lufthansa prepares for strong growth following record annual loss
Talks between the two parties are set to continue in order to reach a comprehensive agreement that benefits everyone.
The government announced it reserves the right to re-impose tariffs should an amicable agreement not be reached.
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