The UK and US have agreed a deal to resolve a long-running trade row over subsidies given to Airbus and Boeing.

The agreement will see retaliatory tariffs, imposed by both countries during the dispute, remain suspended for five years. The announcement comes two days after the European Union also agreed on a truce with the US to end their 17-year conflict over aircraft subsidies. The UK government called it a “major win for industries like Scotch whisky”.

The Scotch whisky industry welcomed the deal after previously being hit during the dispute with a 25% tariff on single malt by the administration of former President Donald Trump. The Scotch Whisky Association estimated more than £600m in exports was lost due to the trade barrier, which also affected other UK industries including cashmere and construction vehicles.

International Trade Secretary Liz Truss said the deal would support jobs across the UK and was “fantastic news for major employers like Scotch whisky and sectors like aerospace”. She added that it meant the UK could now focus on taking its “trading relationship with the US to the next level”.

“We took the decision to de-escalate the dispute at the start of the year when we became a sovereign trading nation, which was crucial to breaking the deadlock and bringing the US to the table,” she said.