Trade secretary Liz Truss travelled to the US over the weekend in a bid to advance UK negotiations for a trade deal, following reports the government has given up hopes of securing a US deal this year.
Truss met with top American officials as the third round of talks entered their second week and is expected to meet US trade representative Robert Lighthizer early this week to take stock of progress.
Truss told the Financial Times that she will challenge the US over retaliatory tariffs it imposed on UK goods such as Scotch whisky as part of its long running dispute with the EU over subsidies to aviation firm Airbus.
She vowed to press “hard to get these punitive taxes removed”, saying that “additional tariffs on great British products, like gin, is totally unacceptable”.
The tariffs were imposed on a wide range of popular EU exports to the US in October and a further increase to the taxes is reported to be under consideration.
Airbus last week attempted to resolve the dispute, announcing that its contracts with the French and Spanish governments had been “amended” to comply with WTO subsidy rules.
Free trade stance
The UK – now negotiating its own trade deals for the first time in decades having formally left the EU – is positioning itself as an advocate for free trade and lower tariffs.
The government had pinned hopes on securing a quick deal with the US which would lower tariffs and provide a £15bn boost to the UK economy.
However, the current retaliatory tariffs are an early sticking point in the talks, with Truss saying the US “talks a good game on free trade and low tariffs” but “the reality is that many of our great British products are being kept unfairly out of their market”.
US waiting game
Although Truss and Prime Minister Boris Johnson both publicly stated ambitions to secure a deal with the US ahead of the presidential election in November, there is a growing realisation in government that this timescale was overly ambitious.
The FT reports that US officials are wary of advancing the talks to the closing stages before they have clarity of the UK’s future relationship with the EU. The UK’s scope in the negotiations could be limited by the extent to which its regulations will remain aligned with Brussels.
Contentious points in the talks also include access to UK markets by US agricultural and pharmaceutical industries and the UK’s plans to introduce a digital tax, which would affect US tech firms such as Facebook, Amazon and Google.