Scottish Whisky under threat because of controversial US tariff – revenue down by £300m

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In October last year, Donald Trump imposed tariffs of 25 percent on a broad variety of products, including Scotch Whisky and Shortbread. Because of this, figures have shown that the US tariffs have cost Scotland’s Whisky sector around £300m – with exports to the US down by three percent since the measures came into effect.

International Trade Secretary Liz Truss recently held bilateral talks with US counterpart Robert Lighthizer on a new Post-Brexit trade deal and had been lobbying for the tariffs to be removed.

Following a review this week, the Trump administration decided to remove Shortbread tariffs but said it would continue to inflict tariffs on Whisky in a long-running dispute.

The Scotch Whisky Association branded the decision as “disappointing”.

Karen Betts, Scotch Whisky Association’s chief executive, said: “It’s deeply disappointing to see that the 25 percent 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 percent since the tariff came into effect and the industry grappling with losses now totalling around £300million.

“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.”

She added that 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.”

Taking a direct hit at Westminster, she added: “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 body said that Scotch Whisky was a “crucial part of Scotland’s economy”, employing over 11,000 people.

Ms Betts continued: “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.”

Brendan O’Hara, SNP MP for Argyll and Bute and chair of Westminster’s All Party Parliamentary on Scotch Whisky told Express.co.uk: “The threat of continued US-imposed tariffs is utterly devastating to the Scotch whisky industry.

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“It’s time for Westminster to wake up to reality, cut the childish games and deliver for Scotland’s whisky sector.

“The industry is looking to Boris Johnson to come good on his pledge to protect the sector from these punishing tariffs – it’s beyond shameful that we are still waiting for action to follow his rhetoric.

“Scotch whisky plays a crucial role in the success of our global food and drinks sector and our economy.

“For all his rhetoric and fleeting visits to impacted areas in Scotland, the reality is that the Tory leader has abandoned the Scotch whisky sector in its time of need.

 “If the Tory government is serious about protecting our vital industries then it will take every step it can to oppose and end these punitive U.S-imposed tariffs.”

After leaving the EU earlier this year, the UK has been trying to tie up swift trade deals with major partners like the United States to capitalise on its new freedom to strike bilateral deals rather than EU-wide ones.

However, Westminster has still been affected by a decision from Washington to impose tariffs on an array of EU food, wine and spirits in retaliation for EU subsidies on large aircraft.

In response to the concerns, Ms Truss said that she was “stepping up talks with the US to remove them as soon as possible”.

Alister Jack, Scotland Secretary, added: “The UK Government has petitioned the highest levels of the US administration, including the President, on this and we will continue to do so until this is dropped.”

 

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