Industry condemns Scotch and Irish whisk(e)y tariffs

Trade bodies have hit out at proposed US tariffs on Scotch and Irish whisk(e)y that would “adversely impact” the industry, and have urged the US, UK and EU to resolve the situation.

The US has proposed tariffs on Scotch, Irish and other EU whiskies

On 1 July, the US government threatened to impose tariffs on Scotch and Irish whisk(e)y over a long-standing dispute with the EU regarding civil aircraft subsidies. This was part of supplementary tariffs on US$4bn worth of EU goods, including whiskies that fall outside of the Scotch and Irish contingents.

It followed the initial list of EU products targeted for potential US tariffs in April this year, worth approximately US$21 billion.

The Scotch Whisky Association said it was disappointed to see Scotch as part of the proposed tariffs, particularly as the sector has been trading with the US tariff-free for 20 years.

A spokesperson for the SWA said: “Exports of Scotch whisky to the US have been zero tariff for 20 years, so it is disappointing that Scotch whisky has been drawn into this dispute.

“The Scotch whisky industry has consistently opposed the imposition of tariffs, which harms economies on both sides of the Atlantic, which depend on trade for their continued prosperity.

“There is a close relationship between the US whiskies and Scotch whisky, not least due to the use of Bourbon casks for maturation which generates around £70m for the US economy each year. We continue to urge the UK government, the EU and the US government to resolve this situation.”

The Irish Whiskey Association (IWA) has also voiced concerns over the matter and the harm it could cause the industry, “both in Ireland and in the US”.

A statement from the IWA said: “Any tariffs imposed on Irish whiskey entering the US market will negatively impact investment and employment in both jurisdictions.

“We urge both sides to continue to strive to achieve a mutually acceptable solution to this issue and to avoid imposing barriers to trade, which will ultimately adversely impact businesses and consumers on both sides of the Atlantic.”

Brexit

Trade union GMB Scotland said the proposed tariffs on Scotch whisky gave a “troubling look” into future trade negotiations with the US when the UK leaves the EU, currently scheduled for 31 October 2019.

Gary Smith, GMB Scotland secretary, said: “If anyone thinks the UK economy isn’t a sitting duck then they are deluded – there will be no special relationships out there.

“It also exposes the fragility of the Scottish economy, where food and drink, and within it whisky and spirits, is the second biggest export sector.

“It reinforces our previous view that for Scotland there is no Brexit deal better than our current deal as members of the European Union.”