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US suspends tariffs on UK goods in Airbus-Boeing dispute

An Alaska Airlines Boeing 737-990 ER, right, was parked next to an Airbus A321 at the Seattle-Tacoma International Airport in Seattle. A World Trade Organization dispute over government aid to Boeing and Airbus has divided the United States and several European countries.Ted S. Warren/Associated Press

The US will suspend retaliatory tariffs on UK products caught up in the longstanding dispute over illegal aid to Boeing and Airbus in a boost for post-Brexit Britain’s trade agenda.

The tariff suspension will last four months to “focus on negotiating a balanced settlement to the disputes,” the UK government said in a statement on Thursday. The decision means goods like Scotch whisky, biscuits, and clotted cream can be imported to the United States from Britain without being subject to an additional 25 percent duty.

Removing tariffs on UK-US commerce has been a priority for Prime Minister Boris Johnson’s government as they seek a broader trade deal with President Biden’s administration. Britain dropped tariffs on some US products indefinitely in January in a bid to reduce trade tensions. The former Trump administration did not reciprocate the UK’s concession.

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“It shows what the UK can do as an independent trading nation,” Johnson said in a statement. “I now look forward to strengthening the UK-US relationship.”

The United States’ temporary rollback could help resolve part of the World Trade Organization dispute over the aid to Boeing and Airbus, which has resulted in WTO-authorized tariffs targeting nearly $12 billion worth of transatlantic trade.

The dispute, which has dragged on for 17 years, involves the United States and four European countries that manufacture Airbus aircraft and parts — Germany, France, Spain, and the UK.

US Trade Representative spokesman Adam Hodge said the tariff suspension agreement only applied to UK goods and EU goods will remain subject to retaliatory tariffs.

In November, the EU announced tariffs targeting $4 billion worth of Boeing planes and US products including spirits, nuts, and tractors as part of a tit-for-tat escalation against the United States. For its part, the United States imposed levies on $7.5 billion of EU products starting in 2019.

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In 2018, prior to the introduction of the tariffs, the US imported about $767 million of goods affected by the measures from the UK, Britain’s Department for International Trade said.

Though the European Commission had repeatedly asked the United States for a six-month suspension of tariffs in order to negotiate a settlement, former US Trade Representative Robert Lighthizer declined to do so and further increased tariffs against EU goods in one of his final acts in office.

The UK said the latest move was a “bold, joint step” toward resolving one of the longest running issues at the WTO. The statement also said that the UK and United States would focus on “addressing the challenges posed by new entrants to the civil aviation market from non-market economies, such as China”.