US, UK suspend tariffs and seek aircraft row resolution

The United States agreed a four-month suspension of retaliatory tariffs imposed on British goods over a long-running aircraft subsidy row, with both sides pledging to use the time to resolve the dispute.

The US administration under former president Donald Trump had imposed tariffs on an array of EU food.

Britain is party to the dispute as a former member of the European Union. Airbus builds wings and other parts in Britain, but assembles its commercial aircraft in the EU.

“The United Kingdom and the United States are undertaking a four-month tariff suspension to ease the burden on industry and take a bold, joint step towards resolving the longest running disputes at the World Trade Organization,” a joint statement said.

“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.”

The multi-billion dollar tit-for-tat tariff battle between the United States, the European Union and Britain, which left the EU at the end of 2020, relates to a long-running row over state subsidies for planemakers Airbus and Boeing .

Airbus spokesman Clay McConnell welcomed the suspension of what he called “lose-lose tariffs” and said the company supports all efforts to reach an agreement.

No comment was immediately available from Boeing. The agreement to lift tariffs is temporary and applies only to UK goods. U.S. tariffs will continue to apply to EU goods, according to a US administration official.

A British official described that as a “real win” which justified a British decision to diverge from EU policy.

In December, Britain said it would use its new-found freedom outside the EU to diverge from the bloc’s common trade policy deciding to unilaterally suspend the tariffs in hope of reaching an agreement with the Trump administration before it left office.

Talks between Britain and the United States on a separate deal focused on the aircraft subsidies issue had been progressing but were abruptly ended in January, according to a source familiar with the matter.

“I am delighted to say that our American allies - under their new President and his hard-working staff at the US Trade Representative - have embraced our move to seek a fair settlement,” she said.

U.S. President Joe Biden’s top trade nominee, Katherine Tai, is headed to confirmation by the full Senate next week.

She told the Senate Finance Committee last month that Washington had completed four rounds of negotiations with Britain since announcing the start of talks. She said she would make it a priority to resolve the long-running dispute over aircraft subsidies with the EU and Britain.

AIRBUS JOBS: Airbus said Thursday that it would be able to avoid forced redundancies in Germany, France and Britain as the European aircraft maker reels from the fallout of Covid-19 on air travel.

The staff situation in Spain, another production site for the aircraft maker, is still uncertain because talks with unions had begun later than elsewhere, it said.

“At this moment, and thanks to the effectiveness of all social measures deployed so far, Airbus does not see the need to implement forced redundancies in France, Germany and the UK,” it said, adding however that this depended on the “successful deployment of ongoing internal mobility measures.”

At the end of June, the company had said it was planning to cut around 15,000 jobs worldwide, or 11 percent of its total workforce.

The company said the cuts were in response to the pandemic, which had triggered the “gravest crisis” the industry had ever seen.

It added at the time that government aid could help reduce the number of layoffs.

Earlier Thursday, the German metalworkers’ union IG Metall said it had reached agreement with Airbus management to avoid thousands of forced redundancies in Europe’s biggest economy.

Airbus had previously announced plans to slash around 5,100 posts of its 55,000 in Germany, but the deal means no one will be forced to leave the company until the end of 2023.

Rather, the cuts will be achieved through voluntary redundancies and hours reductions, the union said.

“The threatened layoffs are no longer on the table,” said IG Metall regional director Daniel Friedrich in a statement.