Fri, December 09, 2022

U.K. Wants to Solve an International Trade Conflict

trade conflict, u.k. economy

The trade war between the U.S. and China is one of the most famous trade conflicts in the modern world. However, there are other important conflicts well. For example, the trade conflict between the U.S. and the European Union (EU). However, the U.K. wants to de-escalate a damaging international trade conflict.

It is worth mentioning that country will suspend retaliatory tariffs imposed on U.S. goods. This will come as part of a dispute over aircraft subsidies from next month. The purpose of this decision is to de-escalate an international trade conflict. People should consider that 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 regulation is complete and indicates an ambition to form closer ties with the U.S.

As a reminder, the trade conflict between the U.S. and the European Union started a long time ago. Importantly, the tariff battle relates to a long-running row regarding state subsidies for aircraft manufacturers Airbus and Boeing.

However, the U.K. wants to reach an agreement with the U.S. Moreover, the country wants to form closer economic ties with the world’s largest economy.

Trade conflict and a new approach

Importantly, Britain formally left the European Union in January. However, under the terms of an 11-month transitional agreement, it joined the European Union in applying tariffs on $4 billion of U.S. goods in November.

People should take into account that, the measures were authorized by the World Trade Organization (WTO) following a 2019 WTO decision to approve U.S. tariffs on $7.5 billion on EU goods.

However, Britain decided to suspend tariffs imposed on U.S. goods as part of a dispute over aircraft subsidies from January of 2021. It makes sense, as Britain wants to persuade the U.S. to reach a settlement. Nevertheless, they could re-impose tariffs if countries fail to reach tangible progress.

It is worth noting that, the European Union is pessimistic about the chances of an immediate change in policy from the U.S.

Separate tariffs on the U.S. related to a row over steel and aluminum would remain in place after January 1. The government wants to protect Britain’s steel and aluminum industries. In 2018, the U.S. imposed tariffs on steel and aluminum that came from the U.S. due to national security concerns. However, the EU, including Britain, responded with its own set of tariffs.

The U.K. is willing to de-escalate the situation as it wants to solve the trade conflict. Britan will suspend retaliatory tariffs imposed on U.S. goods as part of a dispute over aircraft subsidies and the Biden administration should pay attention to this decision.

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