A joint announcement from the new US administration and the UK Government on Thursday said the US will suspend retaliatory tariffs on British luxury for four months. This will temporarily halt the 25 percent tax hike on items like cashmere, wool, tailoring, bed linen and single-malt whisky.
Walpole, the UK trade body representing British luxury businesses, said the tariff suspension will ease the burden on industry and signals that the US and UK are taking a bold, joint step towards resolving the longest running disputes at the World Trade Organization. The impact of the long-standing Boeing Airbus trade dispute has negatively affected businesses and jobs on both sides of the Atlantic.
Washington had previously raised the import tariff on certain high-end goods from Europe to 25 percent hitting UK and EU luxury businesses hard and in retaliation for subsidies paid to manufacture the Airbus fleet of planes.
Helen Brocklebank, Walpole CEO, said: “News that the US tariffs on single-malt whisky, cashmere wool, tailoring and bed linen products have been suspended for four months is very welcome. Globally famous brands like dunhill, Glenfiddich whisky, Hendrick’s Gin, Johnstons of Elgin and Peter Reed have helped create a ‘jewel in the crown’ luxury sector that was growing at nearly 10% each year before the pandemic, worth £48 billion to the UK economy. The impacts of the tariffs on British luxury businesses have been disproportionate and resulted from a dispute not of our sector’s making.”
She added, “Walpole fought in every corner to get these tariffs abolished and welcomed Liz Truss’ support and mediation on the sector’s behalf. This suspension is a very welcome relief and, hopefully, signals that our Government and the new US administration will break new ground with a speedy free-trade agreement. It’s imperative that both sides are now successful in reaching a negotiated settlement resulting in the permanent removal of the tariffs. A much-needed intervention as the British luxury sector recovers from the pandemic.”
The joint government statement said:
“The United States will now suspend retaliatory tariffs in the Airbus dispute from March 4, 2021, for four months. This will allow time to focus on negotiating a balanced settlement to the disputes, and begin seriously addressing the challenges posed by new entrants to the civil aviation market from non-market economies, such as China.
This will benefit a wide range of industries on both sides of the Atlantic, and allow for focused settlement negotiations to ensure that our aerospace industries can finally see a resolution and focus on COVID recovery and other shared goals.”