Scotch distillers toast tariff’s end
LONDON — Scotch single malt whisky makers breathed a sigh of relief Thursday after the United States agreed to suspend tariffs on one of Scotland’s main exports following the resolution of a long-standing trade row between the U.S. and the EU over subsidies to aircraft companies Boeing and Airbus.
President Donald Trump imposed the 25% tariffs in October 2019 as part of the trade dispute over aerospace subsidies. While the U.K. no longer is an EU member, it belonged to the bloc when the tariffs were introduced.
Earlier this week, the U.S. and the EU reached an agreement to end their dispute, paving the way for a 5-year suspension of tariffs both sides had put on an array of products, including olive oil and cheese, as well as whisky.
The Scotch Whisky Association estimated that the tariffs contributed to a 30% fall in total exports to the U.S., equivalent to around $850 million in the 18 months to March 2021.
“This deal removes the threat of tariffs being re-imposed on Scotch whisky next month and enables distillers to focus on recovering exports to our largest and most valuable export market,” Karen Betts, the association’s chief executive, said.
A thaw in U.S.-EU relations had been widely expected following the election of President Joe Biden, who made clear his intention to improve ties. In March, both sides agreed to temporarily halt the tariffs linked to the Airbus-Boeing dispute in a bid to negotiate a solution.
Under Thursday’s agreement, the U.K. will suspend for five years the 25% tariffs on U.S. rum, brandy and vodka. American whiskeys though will continue to face a 25% tariff in the U.K. imposed in connection with the steel and aluminum dispute between the EU and the U.S.
The Distilled Spirits Council of the United States welcomed Thursday’s deal and hoped that a resolution can soon be found to lift the tariffs on American whiskeys, which it said have contributed to a 53% decline in exports to the U.K.
“We hope this positive momentum will also lead to the prompt and permanent removal of the EU and UK’s tariffs on American Whiskeys,” the group’s CEO Chris Swonger said.
His counterpart in the Scotch Whisky Association, Karen Betts, said she hoped these “can also be resolved quickly.”