UK and US in talks over mini trade deal

By Faisal Islam
Economics editor

Publishedduration3 hours ago

media caption’There are tough compromises that have to be made’

The outgoing US administration is in talks with the UK to try to seal a mini-deal to reduce trade tariffs, Trump’s trade chief has told the BBC.

US Trade Representative Robert Lighthizer said he was hopeful for a deal that could see punitive tariffs on Scottish whisky lowered.

The UK recently said it would drop tariffs against the US over subsidies for aerospace firms.

This was in a bid to reach a post-Brexit trade deal with Washington.

In his first international interview, Mr Lighthizer suggested the UK would need to go further than last week’s announcement breaking with the EU’s support of European plane maker Airbus.

“I’m talking to Liz Truss, about trying to work out some kind of a deal… I’m hopeful we can get some kind of an agreement out you know, we don’t have a lot of time left,” he said.

“We have the advantage in that both the US and the UK – particularly the current government of the UK – are not big subsidisers, where some other countries are more inclined to subsidise. So it would be helpful if we could come to some kind of agreement,” he said when asked about lowering tariffs on whisky and cashmere. “We are in discussions, we’ll see how that works out.”

Last week, the UK unilaterally broke with European support of Airbus in a long-running transatlantic trade dispute, changing policy expressed only in January this year of ongoing support even after Brexit, by announcing it would no longer apply tariffs to imports of Boeing aircraft.

Liz Truss said that she wanted to “de-escalate” the 16-year-old conflict over subsidies.

The Airbus-Boeing tariff row

However, the BBC understands that in a phone call, the USTR told the Trade Secretary directly that the US would not treat this as a concession, because, outside of the EU, the UK had “no authority” to continue to apply retaliatory measures on the US.

image copyrightGetty Images

“For sure, it’s true that the UK as an individual was not a party to that Airbus-Boeing litigation, right,” said Mr Lighthizer.

“We brought an action against the EU, France, Germany and the UK. The EU just brought one against us, the member states did not in all cases. so there’s no question that as a legal point, that is correct,” he added.

Instead, the US wants the UK to make concessions on the separate EU dispute over steel and aluminium, where US bourbon was among products upon which European tariffs were levied.

The talks are part of a general move by President Trump’s trade team to wrap up the Boeing-Airbus dispute with the EU, and the UK separately, outside the auspices of the World Trade Organization (WTO).

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