The UK and US have agreed to a truce over the 17-year Airbus-Boeing trade dispute, with both sides set to suspend tariffs for five years.
International trade secretary Liz Truss and US trade representative Katherine Tai agreed to create a new working group to consult on subsidies given to the aviation sector and non-market practices in countries like China in “an open and transparent process”.
The agreement will mean that 25 per cent US tariffs on £550m worth of products like Scotch whisky and Stilton cheese, which were temporarily suspended earlier this year, will be removed for at least the next five years.
It comes after the EU and US negotiated a separate truce to long-running the trade spat earlier this week.
The new agreement comes a part of a transatlantic push to push back against the Chinese government’s interventionist economic policies.
A joint statement between Truss and Tai said: “This development strengthens our special relationship and builds on the revitalized Atlantic Charter, which affirms our ongoing commitment to sustaining and defending our enduring values against new and old challenges.
“The agreement is a model for ensuring fair competition and addressing challenges posed by non-market economies.”
The World Trade Organisation (WTO) ruled in 2019 that Airbus’ four countries of operation – the UK, France, Germany and Spain – had given unfair subsidies to the European aerospace manufacturer in breach of the trade organisation’s rules.
It was the latest chapter in a 17-year dispute involving the EU countries and the US over the world’s two largest aerospace manufacturers Boeing and Airbus.
In response, the WTO said new tariffs could be slapped on some European goods exported to the US as Boeing, based in Seattle, suffered from a competitive disadvantage.