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U.K . to suspend tariffs on U.S. goods for de-escalating trade conflict

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Britain will suspend retaliatory tariffs imposed on U.S. goods as part of a dispute over aircraft subsidies from Jan. 1.

Its trade department said, describing this move as an attempt to de-escalate a damaging international trade conflict.

The decision marks the start of Britain’s divergence from European Union trade policy, coming into effect on the day its exit from the bloc’s rules and regulations is complete and signals an ambition to forge closer ties with the United States.

Trade minister Liz Truss said in a statement, “Ultimately, we want to de-escalate the conflict and come to a negotiated settlement so we can deepen our trading relationship with the U.S. and draw a line under all this.”

No comment was immediately available from the U.S. government or the European Union.

However, Britain said it would suspend its tariffs to try to persuade the United States to reach a settlement, albeit with a warning that they could re-impose them “if satisfactory progress towards an agreeable settlement is not made”.

Truss has repeatedly criticized the U.S. tariffs, which have hurt British exports such as Scotch whisky.

The Distilled Spirits Council of the United States applauded Britain’s decision and urged Washington to seize the chance to work with Britain to resolve both the aircraft subsidy dispute and move to end steel and aluminum tariffs.

Britain meanwhile is looking to capitalize on the situation by trying to strike bilateral trade deals, having quit the EU in 2016. The U.S. is on top of the British wish list, although talks with Trump’s administration made only limited progress and it remains to be seen how President-elect  Biden will prioritize the issue.

U.S. and European officials are meeting at a senior level to resolve the aircraft subsidies dispute, according to multiple sources familiar with the matter.

Truss said separate tariffs on U.S. goods relating to a row over steel and aluminum would remain in place after Jan. 1 to protect Britain’s steel and aluminum industries.

The United States in 2018 imposed tariffs on steel and aluminum coming from the EU, citing national security concerns. The EU, including Britain, retaliated with its own set of tariffs, arguing the U.S. concerns were unfounded.

Truss said the British government would consult with the steel and aluminum sector to see if the tariffs on U.S. goods could be better tailored to suit the British economy.

The stand of the newly elect Biden administration will be keenly watched as the two nations might be preparing to bury the hatchet and start afresh.

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