Whisky sales at risk from US trade war

SCOTLAND’S multi-billionpound whisky industry could be damaged by an escalating trade war between the US and the european Union.

The EU yesterday confirmed it would impose tariffs on American goods, after Donald Trump’s move to impose punitive duties on european steel and aluminium.

The european Commission said it will apply the tariffs to a list of goods from the US, ranging from bourbon whiskey to pleasure boats.

The mounting trade war has now raised fears that the US could strike back by slapping additional duty on Scotch whisky.

exports of our national drink were worth close to £4.4billion last year,

‘Unjustified and disappointing’

with the spirit sold across more than 180 markets.

A total of £922million worth of Scotch whisky was exported to the US last year, according to figures released earlier this year.

The industry directly employs 10,500 people in Scotland and is estimated to support 40,000 jobs in the UK through its supply chain.

International Trade Secretary Liam Fox has so far refused to confirm if the UK will back the eU’s counter-attack, citing the risk to industries such as whisky.

Speaking in the House of Commons this week, he said: ‘We still want to see what the measures themselves are, specifically we have been talking to the Irish Government about the issue of bourbon being on the list because of the potential implications for the Scotch whisky industry and the Irish whiskey industry.’

Dr Fox added that he hoped that once the UK left the eU, ‘we’ll have no problems with a UK exemption’.

The Prime Minister has spoken to Mr Trump by phone, telling him that the tariffs are ‘unjustified and deeply disappointing’, a Downing Street spokesman confirmed.

However, Jyrki Katainen, the european Commission’s vicepresident overseeing trade policy, yesterday said that Brussels had received ‘full support’ for pressing ahead with counter-measures.

He said: ‘We want to defend our industries and our legitimate interests.’

Under eU rules, the tariffs against the US will take effect unless a weighted majority of member states oppose them.

The move comes after President Trump imposed a 25 per cent duty on european steel and a 10 per cent duty on european aluminium.

The Scotch Whisky Association (SWA) has already warned that the industry would have to pay £50million a year in tariffs if existing trading links are not maintained after Brexit.

Speaking at the SWA’s annual members’ day event in edinburgh last month, the association’s chief executive Karen Betts said: ‘We want to continue to be able to export Scotch whisky to europe and the rest of the world with a minimum additional cost and complexity, so our industry can emerge from Brexit in growth.’

Plate steel, such as that produced in Scotland’s last major steelworks at Dalzell in Motherwell, Lanarkshire, is also likely to be affected by the new tariffs.

research published by the SWA last month found that the UK’s trade deficit would be almost 3 per cent greater without Scotch whisky exports.

The deficit reduced from £166billion in 2016 to £153billion last year, aided in part by a surge in Scotch whisky exports.