Scotch tariff maintained – £100m export loss fears

The United States Trade Representative has issued a tariff notification which maintains the 25% tariff on Single Malt Scotch Whisky and Scotch Whisky Liqueurs that has been in place since October 18.

The tariff contributed to a 25% fall in Scotch Whisky exports to the US in the fourth quarter of 2019.

The Scotch Whisky Association warned the tariff could lead to £100 million in lost exports over a year.

Despite the US blow, Scotch Whisky exports grew 4.4% to a record £4.91 billion in 2019.

Chief Executive of the Scotch Whisky Association Karen Betts said: “We’re deeply disappointed that a 25% tariff remains in place on exports of Single Malt Scotch Whisky and Liqueurs to the United States. 

“This tariff has now been in place for four months and is hitting Scotch Whisky producers hard, particularly small distilleries.  

“We’ve seen a significant drop in exports already, and based on this we believe we could be facing at least £100 million in lost exports over a year.

“The EU, US and UK must now redouble their efforts to resolve transatlantic trade disputes quickly, so that Scotch and American whiskies can return to the tariff-free trade from which we have benefitted for more than 20 years. 

“It cannot be right that our industry is continuing to pay the price of trade disputes that have nothing to do with our sector. 

“It’s critical to us that UK-US trade talks now prioritise the urgent, early removal of all tariffs on whiskies.  

“As a first step, we welcome the Prime Minister’s commitment that the UK government will remove EU tariffs on US whiskey as soon as possible now that the UK has left the EU. 

“The UK Government must work to ensure that the US reciprocates. 

“Closer to home, the UK and Scottish governments must now act without delay to mitigate the impact that tariffs are having on Scotch Whisky businesses across Scotland.

“While it will not compensate for losses in the US, a cut to excise duty on spirits in the March Budget would go some way to helping Scotch Whisky businesses strengthen their presence in the UK to counter-balance losses in the US.”