Scotch whisky producers celebrate suspension of US single malt tariff

04 March, 2021

Scotch whisky producers are celebrating after the US government announced it would suspend tariffs on various UK goods for four months.

The long-running tariff war stems from a dispute between the US and the EU over subsidies for Airbus and Boeing.

The UK dropped tariffs on certain US goods after leaving the EU on January 1, and the US has now responded by agreeing to suspend its tariffs on imports of single malt Scotch whisky, cheese, cashmere and machinery.

The Scotch Whisky Association called the suspension “fabulous news”.

Chief executive Karen Betts said: “The tariff on single malt Scotch whisky exports to the US has been doing real damage to Scotch whisky in the 16 months it has been in place, with exports to the US falling by 35%, costing companies over half a billion pounds.

“So today, everyone in our industry - from small companies to large - is breathing a sigh of relief.”

Ivan Menezes, chief executive at Johnnie Walker and Talisker producer Diageo, added: “Today is a very good day for Scotch and Scotland.

“We recognise the government’s tireless efforts, using the UK’s newly independent trade policy, to deliver the suspension and hopefully in time, a permanent end to these punitive tariffs.

“We pay particular thanks to the Prime Minister, Liz Truss, Alister Jack and their teams for speedily negotiating this truce with the new US administration. Final resolution of the aerospace dispute, combined with the announcement of a continued freeze on spirits duty in yesterday’s Budget, will safeguard thousands of jobs across Scotland and the UK.”

Jean-Christophe Coutures, chief executive of Chivas Regal and The Glenlivet supplier Chivas Brothers, said: “We welcome the news that the damaging 25% tariff on the exports of single malt Scotch whisky to the United States has been suspended.

“As producer of The Glenlivet, the market-leading Single Malt Scotch in the US, this return to tariff-free trading is especially appreciated. The removal of these tariffs is critical to the health of the UK economy and its ability to recover from the COVID-19 pandemic.

“The suspension creates valuable breathing space for unrelated sectors like Scotch that have been suffering in a dispute not of their own making. We hope this is the next step towards the permanent removal of the tariffs that have cost the Scotch industry £500m in lost exports, with small distilleries paying the heaviest price.

“We are encouraged and pleased by the hard work of Liz Truss, International Trade Secretary and her team in working to resolve this dispute and forge a new and productive trading partnership with the US. We hope that the next four months generate further progress and that this heralds the beginning of an even closer relationship with our largest market.”

The Distilled Spirits Council of the United States called it “a positive development”, but it is disappointed that UK tariffs on American whiskey remain, and it called for a further de-escalation of the tariff war.

It said in a statement: “The US and UK governments’ commitment to de-escalate trade tensions represents a fresh start to trade relations under the Biden administration and is a hopeful sign that a resolution to the tariffs on US and UK spirits may be in reach.

“While we welcome the US decision to suspend the retaliatory tariffs on UK distilled spirits for four months, we are greatly disappointed that the UK’s debilitating tariff on American whiskey remains in place.

“American Whiskey exports to the UK, our fourth largest market, have declined by 53%, from $150 to $71 million since the imposition of tariffs [between 2018 and 2020]. 

“We urge the US and UK to build on this positive momentum by negotiating an agreement to simultaneously eliminate retaliatory tariffs on all distilled spirits, which will benefit hospitality businesses on both sides of the Atlantic that are struggling to recover and rebuild from the global pandemic.”

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