US tariff will be bad for whisky distilleries

Dear Editor A controversial tariff imposed by the US Government on the EU is set to hit whisky distilleries in Ochil and South Perthshire and across Scotland.

The Trump Administration has plans to impose a 25 per cent import tariff on Scotch whisky in the next stage in the trade war with the EU.

The issue has been simmering for decades, with airline manufacturer, Boeing, accusing European countries of providing unfair assistance to its competitor, Airbus, in the form of below-market-rate loans that were often forgiven. With the help of these loans, Airbus has amassed a 50 per cent share in the market for commercial jets, up from 25 per cent in 1990.

The United States filed a complaint with the World Trade Organisation (WTO) and the complaint was upheld. The WTO has given permission for the US to impose tariffs worth $7.5 billion, or £6.2 billion, on goods coming from the European Union. The tariffs are due to take effect on the 18th October.

The US is the single largest market for Scotch Whisky. Single Malt Scotch Whisky exports to the US in 2018 were worth over £380 million, and the industry is set to bear the burden for half of the tariffs levelled against the UK as part of the EU-wide retaliation.

The EU has previously applied a 25 per cent tariff to American bourbon imports.

The tariffs could cause a 20 per cent drop in exports to the US, and jeopardise 3,000 jobs in Scotland, many of them in rural areas.

In addition, Scottish textiles and biscuits are also in the firing line.

Perthshire, Stirlingshire and Clackmannanshire are home to many distilleries and related industries and are set to be hit substantially if the imposition of these tariffs go ahead. Glenturret, Tullibardine, and Strathearn distilleries are in my constituency. The Deanston and Glengoyne distilleries are nearby.

The tariffs that are about to be imposed pose a big risk to my constituency, which is home to some of the best distilleries in Scotland.

But it’s not just whisky that will be harmed, it will affect the whole supply chain. Many whiskies are matured in the Clackmannanshire part of my constituency while bottles are made in the O-I Glassworks in Alloa, and so the effects will be felt across my patch. This tariff will increase the costs for American voters and will affect the American bourbon industry, as we use their casks to age our spirits here. The tariffs will be a lose-lose situation. I have written to the American Ambassador regarding this, and I have asked the Government to make contingency plans by freezing spirits duty for a third year in a row.

Luke Graham MP, Ochil and South Perthshire