Britain and the United States have failed to make much hope of a “mini-deal” over trade in the last days of the Trump administration.
It was hoped that the US would raise tariffs on imports of Scotch whiskey and cashmere imposed last year as part of the Boeing-Airbus trade dispute.
But these tasks now remain in place while President-elect Biden awaits confirmation from his trade team.
The negotiations were revealed in a BBC interview with US Trade Representative Robert Lighthizer in December.
At the time, he said he was hopeful that he and his British counterpart, International Trade Secretary Liz Truss, could “get some sort of deal out”.
But the BBC understands that a broad offer from the US was rejected last week by the UK after the Business Department expressed concern over the impact on Airbus’ business in the UK.
Since 2019, the EU and the US have both imposed tariffs on each other’s goods over a lengthy trade dispute between planners Boeing and Airbus.
Earlier last month, the UK Department of Commerce announced that it would unilaterally break with the EU’s position to levy tariffs on imports of Boeing aircraft after the end of the Brexit transition period.
It was, Mrs Truss said, an attempt to create goodwill to resolve the 16-year-old dispute.
But the British aviation industry was furious at what it saw as the government reject promises made in early 2020 to support Airbus in the dispute, even after Brexit.
These concerns were the main blockade of a deal, but the chaos in Washington DC over the past week also played a role.
The United States was also looking for tariffs on its exports of bourbon to the United Kingdom – part of a separate trade dispute over steel – to be settled.
A government source said: “Ultimately, we were close to resolving an unmanageable 16-year dispute, but did not quite get there. Any agreement must be balanced and work for the whole of Britain and the whole of British industry.”
They added: “No one has fought harder on this than Liz and she will continue to push it against the Biden administration. She absolutely understands the pain from the affected companies and is determined to get those tariffs lifted and support jobs.”
The source said the government had pursued a “clear de-escalation strategy” with the Trump administration over the dispute, which meant it had avoided being hit with further US tariffs as opposed to the EU.
Ms. Truss still hopes to settle the dispute quickly and has committed to meeting with Katherine Tai, the new U.S. Trade Representative, in Washington DC as soon as she takes office, the source added.
Karen Betts, head of the Scotch Whiskey Association, said her industry was “very frustrated” where an agreement was not reached.
“There is deep disappointment across the Scottish whiskey industry that distillers are still paying the price for an aviation dispute that has nothing to do with us.
“The duty on single malt Scotch whiskey, now in place for 15 months, has caused us to lose over £ 450 million in exports to the US and our losses continue to rise.”