UK battles to retain share of $4bn in EU retaliatory tariffs against US over Airbus dispute

Thu 3 Dec 2020
Posted by: William Barns-Graham
Trade News

Britain is scrambling to avoid losing its ability to hit back against the US in the long-running trade dispute over aviation subsidies.

The US has imposed a 25% duty on many European products, including valuable UK exports such as Scotch whisky, but the WTO recently ruled that the EU could impose its own retaliatory tariffs on the US, worth up to $4bn.

However, the UK has not been named in the WTO’s ruling and will therefore not have the same right as the EU to impose tariffs on US goods, according to Politico.

UK share

The UK argues it has a right to impose some of the $4bn in tariffs approved by the WTO and the Department for International Trade is reportedly readying a list of US products for which the UK would introduce levies.

However, with the UK having left the EU, it is likely that Brussels will oppose the UK doing this. 

The Office of the United States Trade Representative (USTR) does not believe the UK has a sound legal basis to have its own share of the tariffs granted by the WTO to the EU.

No EU support for UK trade deal

The UK is currently seeking to negotiate a trade deal with the US, and it is thought that the ongoing tit-for-tat tariffs could be a strategic bargaining chip in the talks.

According to Politico, the recent round of US-UK trade talks covered the ongoing tariff dispute, but the US decided against lifting levies on UK products.

The US is waiting until after details of the UK’s future trading relationship with the EU are confirmed, so that it has a better understanding of its own strengths and opportunities in relation to it’s a possible UK deal.