The White Dwelling has agreed to slump retaliatory US tariffs on UK exports including scotch whisky, raising hopes of improved relations as talks continue about a post-Brexit transatlantic trade deal.
In 2019, then US president Donald Trump imposed a 25% tariff on a range of EU exports, as part of a 16-year trade dispute over state red meat up for aerospace rivals Boeing and Airbus.
Estimates released last month immediate the responsibility had resulted in a £500m dropoff in sales of Scottish single malt alone.
But the Department for International Trade (DIT) said on Thursday the Biden administration had suspended the tariff. The transfer adopted the UK scrapping punitive measures against Boeing in January.
“The easier it is for Americans to recall a bottle of Macallan, Talisker or Glenfiddich, the more money these producers will have to make investments in their businesses, their staff and futures,” said the trade minister Liz Truss. “Today’s agreement reveals that each the UK and the US are obvious to work collectively to gain back better and take our trading relationship to unusual heights.”
The rapprochement, which was first reported by the Spectator, will also lead to tariffs being lifted on a range of goods, including £11m of cashmere, £38m of pork merchandise and £45m of cheese, the DIT said.
“From scotch whisky distillers to stilton-makers, businesses across the UK will have the back of the US decision today to slump tariffs on this dispute,” said Boris Johnson.
The government said it will continue to survey a “fair settlement” with the White Dwelling that removed all remaining punitive tariffs related to the dispute to spice up the UK’s aerospace trade.
It added that officials on either aspect of the Atlantic have been working on an ambitious trade deal that may grasp £500m of tariffs.
Trade lobby community the Confederation of British Trade said it hoped the decision would pave the way for more cordial trade relations between the US and the post-Brexit UK.
“The obligations on these goods have been harming industry and consumers on either aspect of the Atlantic,” said director general Tony Danker.
“This obvious step must now lay the foundations for talks at pace to accumulate to the backside of the dispute once and for all. This dispute is lose-lose for all alive to at a time when industry is tormented by the pandemic, global trade and investment is crucial for economic recovery.”
The transfer puts the UK at odds with the EU, which imposed retaliatory tariffs on US imports value $4bn (£3bn) after the World Trade Organization dominated the US had given illegal state aid to Boeing. The dispute stretches back to 2006, when the US complained that Airbus was receiving subsidies that attach Boeing at a competitive disadvantage.
Drinks trade figures welcomed an spoil to tariffs that have proved a drag on sales.
“Today is a very good day for Scotch and Scotland,” said Ivan Menezes, the executive govt of Diageo, which owns brands including Johnnie Walker and Talisker. “Final resolution of the aerospace dispute, mixed with the announcement of a continued freeze on spirits responsibility in yesterday’s funds, will safeguard thousands of jobs across Scotland and the UK.”
The Scotch Whisky Association (SWA) said tariffs had done “severe damage” to distillers over the 16 months they have been in place.
“Today, everyone in our trade – from small companies to large – is breathing a thunder of relief,” said the SWA chief govt, Karen Betts.
But while British drinks corporations celebrated, the Distilled Spirits Council of the US said American whiskey distillers have been calm losing out and called for extra action to forestall lost sales.
“Whereas we welcome the US decision to slump the retaliatory tariffs on UK distilled spirits for four months, we are greatly disappointed that the UK’s debilitating tariff on American whiskey remains in place,” said a spokesperson.
“American whiskey exports to the UK, our fourth largest market, have declined by 53%, from $150m to $71m, for the reason that imposition of tariffs.”