UK drops EU tariffs on Boeing as it seeks post-Brexit trade deal with US
The UK has abandoned EU tariffs on the plane manufacturer Boeing in the hope of securing a quick post-Brexit trade deal with the US.
The UK’s move puts it at odds with the EU, which imposed retaliatory tariffs on US imports worth $4bn (£3bn) after the World Trade Organization (WTO) ruled that the US had given illegal state aid to Boeing, its aerospace champion.
The tariff battle is part of a saga of trade disputes centred on illegal subsidies to Airbus, Boeing’s bitter European rival, and the US planemaker. The WTO had previously ruled that EU governments – including the UK, France and Germany – had provided illegal state aid to Airbus. Scotch whisky and woollen jumpers and pullovers were among the UK products hit with 25% tariffs by the US.
The UK government acknowledged that its move was aimed at smoothing relations between the UK and the US as the president-elect, Joe Biden, prepares to take office in the White House in January.
The Department for International Trade said the decision was “an effort to bring the US towards a reasonable settlement and show that the UK is serious about reaching a negotiated outcome”. However, any attempt by the UK to extend the EU tariffs after Brexit could potentially have faced a US legal challenge because the WTO ruling did not account for the UK’s departure from the EU.
The prime minister, Boris Johnson, is among the many senior Conservative politicians who have touted the opportunity for a trade deal with the US as a key aim for the UK after it regains full control of trade policy on 1 January, when the Brexit transition period ends. However, hopes of a quick win for the UK government were dealt a severe blow last week when Biden said he wanted to make investments in the US before looking at trading arrangements.
Under the new post-Brexit approach to trade with the US, the UK will renew retaliatory tariffs on US steel after the US under Donald Trump said steel imports were harming its national security.
Liz Truss, the UK’s international trade secretary, said: “Ultimately, we want to de-escalate the conflict and come to a negotiated settlement so we can deepen our trading relationship with the US and draw a line under all this. We are protecting our steel industry against illegal and unfair tariffs and will continue to do so, but are also showing the US we are serious about ending a dispute that benefits neither country.”
The UK said it could still reimpose the aerospace tariffs if a deal was not reached.