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US set to
target Scotch Whisky with 25% tariff.
Scotch whisky exports to the United
States which last year were worth £1bn
($1.3bn), with Scotch single malt
whiskies accounting for 33% of
that figure, are set to face a tariff of 25%
from 18 October, the new duty is part of
a raft of measures being imposed by the
US in retaliation against EU subsidies
given to aircraft maker Airbus.
Other goods being targeted include
cashmere sweaters, dairy products, pork,
books and some machinery, tariffs are
certain to impact sales and could
ultimately impact jobs here in Scotland.
The US was given the go-ahead to impose
tariffs on £6.1bn ($7.5bn) of goods it
imports from the EU following a World
Trade Organisation (WTO) ruling on
Wednesday, President Trump described the
ruling as a $7.5bn win for the US.
It is the latest chapter in a 15-year
battle between the US and the EU over
illegal subsidies for planemakers Airbus
and rival Boeing.
The EU has threatened to retaliate
similarly against US goods but with the
UK on the brink of exiting Europe Scotch
whisky producers can only hope that a
individual deal with the US after Brexit
will see this 25% tariff scrapped but
that may be unlikely as it is thought
that President Trump has long seen Scotch
whisky as a potential target for
tariffs.
Karen Betts, Chief Executive of the
Scotch Whisky Association commented on
the 25% tariff, saying:
"We are very disappointed that the
United States Government has announced a
tariff of 25% on imports of Single Malt
Scotch Whisky and Liqueurs from the UK.
This is a blow to the Scotch Whisky
industry. Despite the fact that this
dispute is about aircraft subsidies, our
sector has been hit hard, with Single
Malt Scotch Whisky representing over
half of the total value of UK products
on the US Government tariff list
(amounting to over $460 million).
"The tariff will undoubtedly damage the
Scotch Whisky sector. The US is our
largest and most valuable single market,
and over £1 billion of Scotch Whisky was
exported there last year. The tariff
will put our competitiveness and Scotch
Whisky’s market share at risk. We are
also concerned that it will
disproportionately impact smaller
producers. We expect to see a negative
impact on investment and job creation in
Scotland, and longer term impacts on
productivity and growth across the
industry and our supply chain. We
believe the tariff will also have a
cumulative impact on consumer choice.
"The Scotch Whisky industry has
consistently argued against the
imposition of tariffs in our sector. For
the last 25 years, trade in spirits
between Europe and the US has been
tariff-free. In that time, exports of
Scotch Whisky to the US and of American
Whiskey to the UK and Europe have grown
significantly, benefitting communities
on both sides of the Atlantic, boosting
investment, employment and prosperity
for all. For this reason, the Scotch
Whisky Association - alongside American
and European spirits producers - has
urged the EU and the US not to draw
spirits into trade disputes that have
nothing to do with our sector.
"We believe it is imperative that the EU
and US now take urgent action to
de-escalate the trade disputes that have
given rise to these tariffs, to ensure
that these latest tariffs are not
implemented on 18 October, and to ensure
that other tariffs – including on the
export of American Whiskey to the EU –
are removed quickly. In particular, the
UK government must now work with both
sides to urge a negotiated settlement
and to ensure that these damaging
tariffs do not take effect.
The World Trade Organisation's dispute
settlement body must formally adopt the
ruling but is not expected to overturn
the decision.
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