The US will not move to remove tariffs on UK steel and aluminium while the threat of Boris Johnson’s government triggering Article 16 hangs over negotiations on the Northern Ireland Protocol.
EU relations minister Lord Frost has said that the UK will act unilaterally and suspend aspects of the Protocol’s trade rules if a workable solution to its future implementation is not reached.
Impasse
In a communication seen by the FT, a US commerce department official stated that talks with the UK on easing metals tariffs could not move ahead while the current impasse over Northern Ireland endures.
Sources say that the UK has been informed of this.
EU deal done
The EU and US reached a deal to suspend Trump-era tariffs on metals in October, fuelling hope that the UK would follow suit.
However, UK exporters still face 25% tariffs on steel and 10% on aluminium. Retaliatory tariffs are in place for US goods entering the UK, including bourbon, jeans and motorbikes.
Political blocks
The UK Department for International Trade (DIT) said there were ongoing talks with the US and that it did not see “any connection with this particular issue and the Northern Ireland Protocol”.
One DIT insider admitted to Politico that post-Brexit issues, such as the Protocol, have proven to be “political blocks” to trade agreements between Washington and London.
Trade minister Anne-Marie Trevelyan is travelling to the US next week and is expected to explain the UK’s position over the Protocol.
Confusion
Trade experts are confused as to why the metal tariffs on UK exports were not dropped soon after the EU reached its own equivalent deal, as happened when the EU and UK reached their own separate deals with the US on the Airbus-Boeing dispute this summer.
Holger Hestermeyer, professor of international and EU law at King’s College London said: “The fact that this does not seem to be the case drives home the point that the UK and the EU are drifting apart.”
Medicines move
UK-EU talks over the Protocol continue this week with the EU suggesting that it could act unilaterally to guarantee the supply of medicines from GB to Northern Ireland, reports the BBC.
EU negotiator Maros Sefcovic has said that a deal on medicines could unlock the rest of the Protocol discussions, but that time was running out.
Drugs companies in Britain have said they will stop supplying Northern Ireland due to costly new regulatory regime that requires additional testing of drugs that go on the market in NI.
For more information about how traders can mitigate for the impacts of trade disruption - including the possibility of the UK triggering Article 16 - sign up to this free webinar on 7 December.
