Scotch Whisky blow as US retains 25% tariff

The US government has said it will maintain 15% tariffs on Airbus aircraft and 25% tariffs on other European and UK goods — including Single Malt Scotch Whisky — as part of a 16-year trade dispute over state aid for Airbus and American rival Boeing.

Scotch exports to the US are down 30% since the tariff came into effect and the industry is grappling with losses that currently total around £300 million. 

However, the US held off adding extra tariffs as it had threatened.

The US lifted tariffs on shortbread and other products and dropped plans to put a tariff on blended whisky and British gin, 70% of which is made in Scottish distilleries.

US Trade Representative Robert Lighthizer said the EU had not taken the actions necessary to come into compliance with World Trade Organization decisions.

Scotch Whisky Association CEO Karen Betts called on the UK government to accelerate negotiations to bring an end to tariffs between the UK and US before preparations for November’s Presidential election “bring talks to a halt.”

Betts was critical of the UK’s efforts, saying; “It has taken the UK government a full six months after the UK left the EU to start to tackle tariffs directly with the US government, which seems to us inexplicably slow …

“”While we welcomed International Trade Secretary Liz Truss’ visit to the US last week, to talk directly to US Trade Representative Robert Lighthizer, it was clearly too little, too late.”

Truss welcomed the absence of new tariffs, but said she had raised the whisky issue with Lighthizer during talks last week and that she would now go further. 

“These tariffs damage industry and livelihoods on both sides of the Atlantic and are in nobody’s interests,” she said in a statement.

“I am therefore stepping up talks with the U.S. to remove them as soon as possible.”

The full statement from Scotch Whisky Association CEO Karen Betts read: “It’s deeply disappointing to see that the 25% tariff on Single Malt Scotch Whisky exports to the US has been retained by the US government. 

“The tariff is inflicting huge damage on the Scotch Whisky sector, with exports to the US down 30% since the tariff came into effect and the industry grappling with losses now totalling around £300 million. 

“These losses relate only to tariffs – the impact of Covid-19 has been serious and has compounded what is now a very serious situation for Scotch Whisky, with some brands forced out of the market and jobs in the industry and our supply chain now at risk. 

“The UK government must accelerate negotiations to bring an end to tariffs between the UK and US before preparations for November’s Presidential election bring talks to a halt.  

“It has taken the UK government a full six months after the UK left the EU to start to tackle tariffs directly with the US government, which seems to us inexplicably slow. 

“The UK government must now focus its energy on developing a clear strategy for settling the UK share of the Airbus/Boeing and steel and aluminium disputes with the US, rather than looking to the EU to do this for us. 

“Negotiations on a free trade agreement with the US will not solve tariffs and will not be credible while they remain in place.

“While we welcomed International Trade Secretary Liz Truss’ visit to the US last week, to talk directly to US Trade Representative Robert Lighthizer, it was clearly too little, too late.

“In the meantime, the Prime Minister and Chancellor must step in to ensure that the damage to our industry is, as far as possible, mitigated. 

“Scotch Whisky is a crucial part of Scotland’s economy, employing over 11,000 people and many more than that through our supply chain, in some of the UK’s most productive jobs. 

“The support promised to date – £500,000 of export promotion – is woefully inadequate compared to the support offered by the French and US governments to their national industries that have been targeted by tariffs.

“At the very least, the government must commit to a duty cut in the Autumn Budget.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.