U.K. and U.S. reach temporary trade truce

The United Kingdom and the United States today announced a temporary trade truce that will see a suspension of certain tariffs related to the Airbus/Boeing dispute. The suspension will last for four months and cover products from Scotch whisky to cashmere.

The dispute over aid to Boeing (NYSE:BA) and Airbus Group SE (PA:AIR) has been ongoing for 17 years and involves the US and the four European countries that manufacture parts for Airbus aircrafts, the UK, Germany, France, and Spain. US Trade Representative Hodge confirmed that the tariff suspension will only be on UK goods and EU products will still be subject to tariffs.

The news that the US has suspended tariffs on UK goods follows the decision by the UK government to suspend Boeing tariffs in January, after the UK formally left the European Union. It was described as a “show of good faith” by the UK government so it was not hit with further and tariffs and allowed both countries to work on ending the dispute.

“It shows what the UK can do as an independent trading nation, striking deals that back our businesses and support free and fair trade,” UK Prime Minister Johnson said.

“I now look forward to strengthening the UK-US relationship, as we drive economic growth and build back better together.”

What products are affected?
Good that were affected by the tariffs included Scotch whisky, cashmere, machinery, cheese and pork.
Speaking following the announcement, Diageo (LON:DGE) CEO Ivan Menezes called it “a very ood day for Scotch and Scotland”. Diageo makes various Scotch whisky brands including Johnnie Walker, Talisker and Lagavulin.

In the year before the tariffs were imposed, the US imported £550mln worth of goods affected by the tariffs. Exports of single malt Irish and Scotch whisky to the US were worth around £340mln.

“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,” said UK International Trade Secretary Truss.

“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.”