UK Will Rescind Boeing Tariffs on US Imports in January

The United Kingdom will stop collecting 15% punitive tariffs on U.S. aircraft; 25% tariffs on more than 100 products, notably agricultural, food and beverage items, including chocolate, ketchup, rum, vodka, frozen orange juice and cotton; and 25% tariffs on equipment, such as tractors, firetrucks and exercise equipment.

The change will come Jan. 1, when the U.K. leaves the European Union. The World Trade Organization authorized the aircraft tariffs in retaliation for trade-distorting subsidies to Boeing. The U.S. has similar tariffs on European goods, also WTO authorized, for Airbus subsidies.

However, International Trade Secretary Liz Truss said retaliatory tariffs over the steel and aluminum tariffs on British steel and aluminum will continue. She said Dec. 8 that she might change the tariffs in response to Section 232 tariffs after input from key stakeholders. She also said removal of the Boeing tariffs is “an effort to bring the US towards a reasonable settlement and show that the U.K. is serious about reaching a negotiated outcome. The government reserves the right to impose tariffs at any point if satisfactory progress towards an agreeable settlement is not made.”

The Distilled Spirits Council of the U.S. welcomed the news that retaliatory tariffs on rum, brandy and vodka will be lifted, but noted that tariffs on whiskey remain, since they were put on for the steel and aluminum action, and that exports to the U.K. of American whiskey fell by 55%. “We urge the United States to seize this opportunity to intensify its engagement with the UK to settle the WTO Boeing/Airbus disputes as well as the Section 232 steel and aluminum tariffs,” the group said.

U.S. Trade Representative Robert Lighthizer said he welcomes the decision but then added that the U.K. would have had no authority to continue the retaliation once it left the European Union, given that the EU brought the case. “By contrast, the United States sued the EU as well as France, Germany, Spain, and the U.K. individually over massive subsidies to Airbus. As a result, the WTO authorized the United States to impose countermeasures on each of those countries and the entire EU. The United States has, however, exercised great restraint with its retaliatory tariffs. Like the U.K., the United States considers that a negotiated settlement best serves the interests of all parties.”