By William James and Andrea Shalal
LONDON/WASHINGTON, March 4 (Reuters) - The United States
agreed a four-month suspension of retaliatory tariffs imposed on
British goods such as Scotch whisky over a long-running aircraft
subsidy row, with both sides pledging to use the time to resolve
The U.S. administration under former president Donald Trump
had imposed tariffs on an array of European Union food, wine and
spirits, including on Scotch whisky, which the industry says had
put its future at risk.
Britain is party to the dispute as a former member of the
"The United Kingdom and the United States are undertaking a
four-month tariff suspension to ease the burden on industry and
take a bold, joint step towards resolving the longest running
disputes at the World Trade Organization," a joint statement
"This will allow time to focus on negotiating a balanced
settlement to the disputes, and begin seriously addressing the
challenges posed by new entrants to the civil aviation market
from non-market economies, such as China."
The tariff truce is separate from broader U.S.-UK talks on a
post-Brexit trade agreement, but sends a positive signal about
Britain and the United States were hoping to reach a trade
deal before the expiration of fast-track trade promotion
authority granted to the U.S. federal government by Congress in
In order to hit that deadline, U.S. trade officials would
have to notify Congress about their intention to seal a deal
sometime in April.
The multi-billion dollar tit-for-tat tariff battle between
the United States, the European Union and Britain, which
completed its exit from the EU at the end of 2020, relates to a
long-running row over state subsidies for planemakers Airbus
Airbus spokesman Clay McConnell welcomed the suspension of
what he called "lose-lose tariffs" and said the company supports
all efforts to reach an agreement.
Airbus builds wings and other parts in Britain, but
assembles its commercial aircraft in the EU.
No comment was immediately available from Boeing.
Ivan Menezes, CEO of Diageo, the maker of Johnnie
Walker and Talisker whisky said a permanent solution would help
safeguard thousands of jobs across Scotland and the rest of
The agreement to lift tariffs is temporary and applies only
to UK goods. U.S. tariffs will continue to apply to EU goods,
according to a U.S. administration official.
A British official described it as a "real win" which
justified a British decision to diverge from EU policy after
Brexit and ditch the tariffs in hope of reaching an agreement
with the Trump administration before it left office.
At the time, the EU questioned whether Britain had the legal
right to keep those tariffs in place after leaving the bloc.
Talks between Britain and the United States on a deal
focused on the aircraft subsidies issue had been progressing but
were abruptly ended in January, according to a source familiar
with the matter.
"I am delighted to say that our American allies – under
their new President and his hard-working staff at the U.S. Trade
Representative - have embraced our move to seek a fair
settlement," she said.
U.S. President Joe Biden's top trade nominee, Katherine Tai,
is headed to confirmation by the full Senate next week.
She told the Senate Finance Committee last month that
Washington had completed four rounds of negotiations with
Britain since announcing the start of talks. She said she would
make it a priority to resolve the long-running dispute over
The Distilled Spirits Council of the United States welcomed
Thursday's decision but said it was disappointed that British
tariffs on U.S. whiskey relating to a separate dispute over
steel were still being applied.
Tai, asked if she would prioritise an agreement with
Britain, told the committee in written responses to questions
released this week that Britain was "an important trading
partner and ally".
(Reporting by William James in London Aakriti Bhalla in
Bengaluru and Andrea Shalal in Washington; editing by Paul
Sandle, Jason Neely and Toby Chopra)