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US and UK whisky industries demand action on tariffs

Published:  29 January, 2020

Whisky industry bodies on both sides of the Atlantic have issued a joint call for their respective governments to stop using tariffs on whisky as a proxy battle in unrelated trade disputes.

The EU imposed a 25% import tariff on American whiskey in June 2018 after the US imposed tariffs on European steel and aluminium. The US placed the same tariff on imports of single malt Scotch whisky in October 2019 as part of its decades-long trade dispute with the EU over state subsidies in the aircraft manufacturing sector.

Prior to these developments, the two industries had thrived in a tariff-free trading environment for a quarter of a century. Exports of Scottish whisky to the US grew 270% in that period, while exports of American whiskey to the UK rose 410%.

The value of Scotch exports to the US market will fall by £100m this year alone, the Scotch Whisky Association (sWA) is predicting. Exports hit £1bn last year, up from £280m in 1994.

Karen Betts, chief executive of the SWA, said: “The current disputes about steel and aluminium and aircraft manufacture have nothing to do with us, but the tariffs stemming from them are causing needless damage to our industry on both sides of the Atlantic, and to the livelihoods we support. Constructive negotiations must solve trade disputes, tariffs on whiskies will not."

“Many smaller Scotch Whisky companies are now asking themselves how they can continue exporting to the US, whether they can build up alternative markets, and if not how their businesses will cope.”

Chris Swonger, president and chief executive of the Distilled Spirits Council of the United States, said:“We need to get back to zero-tariff trade which benefitted distillers on both sides of the Atlantic so our industries can go back to doing what we do best – distilling amazing whiskeys and sharing them with the world.”