UK to drop EU tariffs on Boeing aircraft

The British government announced this week it will suspend retaliatory European Union tariffs on Boeing aircraft as part of the ongoing EU-U.S. dispute over subsidies to their respective commercial aircraft manufacturers.

The move aims to reduce trade tensions with the U.S. and “show that the UK is serious about reaching a negotiated outcome,” the Department for International Trade said in a statement. The UK will set its own tariff policy when it completes its split from the EU at year-end.

“As an independent trading nation once again, we finally have the ability to shape these tariffs to our interests and our economy, and to stand up for UK business,” added International Trade Secretary Liz Truss. “Ultimately, we want to de-escalate the conflict and come to a negotiated settlement so we can deepen our trading relationship with the U.S. and draw a line under all this.”

The EU announced the tariffs in November on some $4 billion of U.S. goods, targetting various Boeing models and products including spirits, nuts and tractors. In a parallel case for Airbus, the U.S. itself also imposed levies on $7.5 billion of EU products in October 2019, with British exports ranging from Scotch whisky to biscuits to clotted cream affected by the duties.

UK has ‘no authority’ to impose tariffs

The U.S. Trade Representative’s office welcomed the UK’s decision, though it highlighed that Britain didn’t have authority from the World Trade Organization to impose tariffs because it didn’t bring a case to the WTO in its individual capacity. By comparison, the U.S. sued the EU as well as France, Germany, Spain, and the UK individually over subsidies to Airbus.

The UK has in recent months engaged in its own discussions with the Trump administration about finding a resolution to the aircraft dispute and has been pushing hard for the U.S. to lift tariffs on Scotch whisky in particular. But because of Airbus’ significant presence in France and Germany, any real deal will likely have to involve the EU.