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US suspends tariffs on UK goods in trade dispute

Emma Bowden, PA
·3-min read

The US has agreed to suspend millions of pounds’ worth of tariffs on UK exports as part of an effort to resolve a transatlantic trade dispute over aerospace subsidies.

Washington will temporarily suspend tariffs on a range of goods, cutting the 25 per cent tariff rate on Scotch whisky to zero per cent for four months, according to the Department for International Trade.

Donald Trump’s administration hit the European Union with tariffs on £5.6 billion worth of goods in retaliation for state support given to Airbus, with products including Scotch whisky badly affected by the measures.

The EU responded with tariffs on £3 billion of American goods over subsidies given to Boeing, but the UK presented an olive branch to the US by announcing its decision to suspend tariffs from January.

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The Biden administration has now moved to reciprocate by suspending tariffs on a range of goods, in an effort to reach a negotiated solution to the dispute.

Prime Minister Boris Johnson said on Thursday that the measures, due to come into force on Monday, would benefit businesses across the UK.

“From Scotch whisky distillers to Stilton-makers, the US decision to suspend tariffs on some UK exports today will benefit businesses right across the UK,” he tweeted.

“Fantastic news as we strengthen the UK-US trading relationship and work to build back better from the pandemic.”

Scotch was the UK’s largest food and drink export in 2020, and exports of single malt Irish and Scotch whiskies to the US were worth about £340m in 2018.

Exports to the US have fallen by 35% over the 16 months the measures have been in force, costing companies more than half a billion pounds, according to the Scotch Whisky Association (SWA).

Ivan Menezes, chief executive of drinks giant Diageo, welcomed the move and said: “Today is a very good day for Scotch and Scotland.

“We recognise the Government’s tireless efforts, using the UK’s newly independent trade policy, to deliver the suspension and hopefully in time, a permanent end to these punitive tariffs.”

The Government said it will continue to engage with the US to agree a fair settlement to the dispute but reserves the right to re-impose tariffs if satisfactory progress is not made.

Cashmere producers, pig farmers and stilton-makers will also benefit from the suspension of tariffs, according to the Department for International Trade.

International Trade Secretary Liz Truss said: “I am delighted to say that our American allies – under their new president and his hard-working staff at the US Trade Representative – have embraced our move to seek a fair settlement.

“The benefits will be felt across our nation, especially in Scotland, where Scotch whisky distillers will be able to sell at lower prices in the United States, their most valuable market.

“The easier it is for Americans to buy a bottle of Macallan, Talisker or Glenfiddich, the more money those producers will have to invest in their businesses, their staff and futures.”