The Scotch Whisky Association (SWA) on Thursday called for governments on both sides of the Atlantic to eliminate the tariffs on spirits which are costing millions of pounds in lost exports.

More than 10,000 people are directly employed in the Scotch Whisky industry — with more than 40,000 jobs across the UK supported by Scotch.

The SWA plea comes as the UK and US governments formally begin talks on a US-UK free trade agreement this week.

The tariffs, imposed in October 2019 in connection with the EU-US trade dispute over aircraft subsidies, resulted in a 27% decline in Scotch Whisky exports to the US during the final quarter of 2019.

As part of the steel and aluminium trade dispute, the EU imposed a 25% retaliatory tariff on American Whiskey in June 2018. 

As a result, 2019 exports of American Whiskey to the EU market fell by 27%, with small US craft distillers taking the hardest hit.

Scotch Whisky Association CEO Karen Betts said: “We are very pleased that formal trade negotiations have begun between the UK and the US governments. 

“Now more than ever, keeping trade free, fair and flowing will be key to the UK’s recovery as we grapple with the human and economic costs of COVID-19.

“For Scotch Whisky, the 25% tariff imposed last year by the US government on exports of Single Malt is hitting producers hard, with exports to the US down 27% in the final quarter of 2019. 

“Just as the EU tariff on American whiskey continues to hit American producers hard.

“The difficult situation we are in on tariffs has now become much harder as our industry copes with the impact of the COVID-19 crisis too. 

“With lockdowns across the US and Europe – critical for slowing the spread of the COVID-19 and saving lives – bars, restaurants and other venues have closed, which is very serious for the fabulous hospitality businesses we have worked with for many years and the people who work in them.

“In these difficult times, trade disputes and tariffs are compounding the damage to businesses. 

“Scotch Whisky and American Whiskey distillers, bars and restaurants need to find ways through the human and economic crisis brought on by COVID-19. 

“Removing tariffs on whiskies would be very significant for us right now. 

“So, we are urging the negotiators to reach an agreement to remove all tariffs on whisky. 

“In doing so, they will help ensure that our industry can make our full contribution to economic recovery.”