Whisky losses after US tariffs ‘reach half a billion pounds’

New figures suggest exports of single malt Scotch whisky have fallen by more than a third.

Whisky losses after US tariffs ‘reach half a billion pounds’ PA Media

Losses to Scotch whisky exports after tariffs were imposed by the United States have reached half a billion pounds, according to an industry body.

New figures suggest exports of single malt Scotch whisky have fallen by more than a third – amounting to more than £500m – since a 25% tariff was imposed in October 2019.

The tariffs of £5.6bn were initially introduced by the administration of former president Donald Trump, in retaliation for state support given to Airbus, with products including Scotch whisky badly affected by the measures.

The Scotch Whisky Association (SWA) said distillers are “continuing to pay the price for an aerospace dispute that has nothing to do” with them.

Chief executive Karen Betts has described the current situation as “unsustainable”.

She said: “Since tariffs were put in place, our exports to the US have fallen by 35%, amounting to over half a billion pounds in lost exports.

“This is being borne by large and small producers alike, who are losing sales and market share in what has been for decades the industry’s largest and most valuable market, which they may never now recover.

“It’s very hard for Scotch whisky producers to understand why the UK Government is so unwilling to address the UK violations of World Trade Organisation (WTO) rules on aerospace subsidies at the root of the tariffs.

“Distillers are suffering terrible losses and still the government, after 16 years of unsuccessful litigation, is unprepared to take the necessary steps to ensure subsidies comply with the UK’s international obligations.”

Last month, Labour leader Sir Keir Starmer used a newspaper column to call on the UK Government to negotiate with the new US administration of President Joe Biden.

As well as calling for the immediate suspension of tariffs, the SWA wants more support for the industry given the losses during the coronavirus pandemic.

Ms Betts added: “The UK Government must now act urgently and call for the immediate suspension of all tariffs on unrelated sectors and, at the same time, redouble efforts with the new US administration to resolve the aerospace dispute and lift tariffs permanently.

“The Government must also offer some support to distillers, who are shouldering tariff losses alongside dealing with unprecedentedly difficult trading conditions as a result of Brexit and global restrictions to curb Covid-19 transmission.

“As part of this, the chancellor must deliver a package of support for the industry, including a cut to spirits duty in next month’s budget.”

A Department for International Trade spokesman said: “The secretary of state for international trade has led intensive talks with the US to get these unfair tariffs on UK exports removed.

“We will continue to push hard for a resolution that works for the whole of the UK – including our brilliant Scotch whisky producers.

“We have a clear strategy in place to de-escalate the dispute and we will work with the new US administration at the earliest opportunity to find a solution.”

Scotland’s trade minister Ivan McKee MSP said: “For over a year Scottish products, including single malt Scotch whisky, have faced tariffs of 25% in the USA as part of a long-running dispute involving the US, the UK and EU member states over subsidies for aircraft manufacturers.

“These iconic Scottish products have no connection to the aerospace industry, but are suffering as a result.

“The damaging impact of these tariffs on businesses and communities is being felt across Scotland and is increasing, as the SWA’s figures make clear today.

“The Scottish Government has repeatedly called on the UK Government to do more to encourage a settlement and I will be raising this again with trade policy minister Greg Hands when I meet him on Wednesday.

“Scottish producers have suffered enough for something that has nothing to do with them and cannot wait any longer.

“The election of President Biden provides a fresh opportunity to pursue this issue and I will urge Mr Hands to take immediate action.”

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