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Scotch whisky tariffs suspended

Published:  04 March, 2021

The US has lifted tariffs on Scotch whisky for four months as leaders enter into negotiations to put a long-term solution in place.

Retaliatory tariffs of an additional 25% duty on Scotch whisky were introduced by President Donald Trump first back in October 2019 over a long-running dispute within the transatlantic aviation industry.

Now, a joint statement between the UK and the US said the two nations are “undertaking a four-month tariff suspension to ease the burden on industry and take a bold, joint step towards resolving the longest-running disputes at the World Trade Organization”.

Since the tariffs on Single Malt Scotch Whisky were introduced, the Scotch Whisky Association has said exports to the US have fallen by more than 30% and more than half a billion pounds have been lost to the industry due to the decrease in sales abroad.

Ivan Menezes, chief executive at Diageo, has welcomed the move.

“Today is a very good day for Scotch and Scotland. We recognise the Government’s tireless efforts, using the UK’s newly independent trade policy, to deliver the suspension and hopefully in time, a permanent end to these punitive tariffs.

“We pay particular thanks to the Prime Minister, Liz Truss, Alister Jack and their teams for speedily negotiating this truce with the new US Administration. Final resolution of the aerospace dispute, combined with the announcement of a continued freeze on spirits duty in yesterday’s Budget, will safeguard thousands of jobs across Scotland and the UK,” he said.

In December, International Trade Secretary Liz Truss said the UK would be unilaterally dropping the tariffs imposed on the US by the EU once it left the Brexit transition period in a bid to de-escalate the conflict.

She said she was “delighted” by the US’s decision.

The dispute over aviation, which has dragged on for 17 years, involves the US and the four European countries that manufacture Airbus aircraft and parts: Germany, France, Spain and the UK.

By giving state support to the Airbus, the US said the European nations were putting America’s Boeing company at an unfair disadvantage, and retaliated with additional 25% of duty on Single Malts.

Tariffs on cashmere, machinery and other products have also been suspended as part of the agreement.