The Financial Times quoted a US Department of Commerce spokesman as saying that talks with the UK on cutting metal tariffs could not move forward.
The US is postponing a deal to abolish tariffs on steel and aluminum in the UK due to Washington fears about London's threats to change the rules of trade in Northern Ireland. The report said the official reiterated US concerns over British threats to bring Article 16 into effect.
Article 16 of the protocol allows either party to unilaterally suspend certain elements of a transaction if this creates serious economic, social or environmental problems.
According to the protocol, Northern Ireland actually remains on the EU's single market for goods. This helps avoid a hard border on the island of Ireland, but increases the number of checks and requirements for trade in goods crossing the Irish Sea from the UK to the north.
The UK or EU may invoke Article 16 if they believe the arrangement caused “serious economic, social or environmental hardship” or “trade diversion.”
The report says that officials in Washington have informed their British counterparts of the reason for the delay in canceling tariffs. Negotiations have stalled due to pressure from Congress over UK threats to implement the clause.
British Prime Minister Boris Johnson has threatened that his government will apply Article 16 unless a solution is found soon with the EU on UK-Northern Ireland trade.
The EU and the US agreed to suspend billions of dollars in steel and aluminum tariffs in October.
