Scotch whisky leaders head to US for tariff talks

Karen Betts

Scotch whisky industry leaders have travelled to the United States for trade talks amid fears that the Trump administration could further increase tariffs on single malts.

The US imposed a 25% duty on Scotch whisky and liqueurs on October 18 as part of a long-running dispute at the World Trade Organisation (WTO) over aircraft subsidies.

A review of tariffs is now being carried out by the Office of the US Trade Representative, which could result in rates on single malts increasing.

Scotch Whisky Association (SWA) CEO Karen Betts is in Washington DC this week to discuss the tariffs.

Betts told the Press Association news agency: “There’s real concern about a rise in tariffs on Scotch whisky – a further rise could be devastating to distillers.

“We will speak to the US Government and urge them to lift the tariffs altogether – all the tariffs are doing is damaging the sector on both sides.

“Tariffs on whisky products also has an impact on the American economy.

“Price rises impact sales, which impacts on investment and jobs, and also has an effect on taxes.”

The US is Scotch Whisky’s largest and most valuable single market with over £1 billion of Scotch Whisky exported there last year.  

The Trump administration recently announced 25% tariffs on single-malt Scotch whisky, French wine and Italian cheese in retaliation for European Union subsidies on large aircraft.

By value, 33% of Scotch Whisky exports to the US in 2018 were single malts — a value of £344 million, or $463 million. 

The US market accounted for 22% of global value, and 10.7% of global volumes of Scotch Whisky exports in 2018.

About 137 million bottles of Scotch Whisky were exported to the US last year.

Scotland’s Finance Secretary Derek Mackay told BBC Good Morning Scotland: “I’m incredibly concerned because it will impact severely, and I think possibly already is, on our exports of whisky and other products to the USA.

“We’ve tried to engage with the UK Government on this matter. It is of profound concern that the situation might get worse because of the actions of the US administration.

“We want to see that this trade war, if you like, is removed so that it doesn’t continue to damage Scotland’s economy which it feels as if has been disproportionately targeted by the US administration and that is a matter for the UK Government.”

Asked what the UK Government has been saying, he replied: “They tell us, obviously, that they have been trying to apply pressure on the US administration to have this issue resolved which then relates to matters in relation to the EU and the US view on trade subsidies elsewhere.”