Britain looks to renegotiate trade deal with U.S. by dropping Airbus-Boeing retaliatory tariffs

With the U.K. leaving Europe on January 1, 2021, Liz Truss, the U.K. Trade Secretary, is looking to negotiate an independent deal with the U.S over trade tariffs the U.S. imposed on Europe (including the U.K.) after the World Trade Organization (WTO) gave the go ahead for penalties to be applied after it was revealed that Airbus, Boeing’s principal rival, had been in receipt of financial aid at favorable terms which broke international regulations. In addition, citing national security issues, a fact that is hotly disputed in its accuracy (Britain’s trade department says: “any claim that U.K. steel and aluminum imports harm U.S. national security is false and without foundation.”), the U.S has also imposed substantial tariffs on U.K. steel and aluminum imports to the U.S. 

“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,” Truss said. Britain will reserve the right to reimpose the tariffs. Truss meanwhile said the rollover of the EU’s tariffs on steel and aluminum shows “we are protecting our steel industry against illegal and unfair tariffs — and will continue to do so.” Yet within that, she said, Britain is “also showing the U.S. we are serious about ending a dispute that benefits neither country.”

Europe had now been granted the right to impose up to US$4 billion in tariffs on U.S. exports after it was revealed that Boeing had also been in receipt of funding, the favorable terms of which broke WTO regulations. While Britain looks to use that right to de-escalate the current ‘trade war’ between the U.S. and European countries, Donald Trump, the outgoing U.S. president, has instead threatened to greatly increase any tariffs on Europe if they began imposing tariffs the WTO have agreed it can. The U.K.’s problem, from a legal standpoint, is that when the WTO granted Europe the right to impose retaliatory sanctions on the U.S., it did not name specific countries and, as of January 1, 2021, the U.K. will no longer be part of Europe and therefore the WTO’s decision on European tariffs will no longer apply to it.

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