Possible rise in tariffs ‘deeply worrying’ for Scotch

29th June, 2020 by Melita Kiely

The possibility of additional tariffs on Scotch whisky exports to the US are “deeply worrying”, the Scotch Whisky Association (SWA) said, as it called for the UK, US and EU to resolve their transatlantic trade disputes.

Scotch Masters

The SWA said the US’s proposal of additional tariffs was “deeply worrying”

The US imposed a 25% import tariff on a number of EU goods, including single malt Scotch whisky, on 18 October last year. The move came in relation to an ongoing spat between the EU and US regarding aircraft subsidies for plane manufacturer Airbus, which the US argues caused the Boeing 777, 787 and 747 aircrafts to lose sales and market share, thus affecting revenue for US producers and jobs for US workers.

The SWA said the tariffs have resulted in a 25% drop in exports of single malt Scotch and Scottish liqueurs to the US since October 2019.

Last week, the US Trade Representative (USTR) sought public opinions on whether to increase tariffs on EU products, and extend tariffs to other products, including gin and vodka made in the UK.

Karen Betts, SWA chief executive, said: “This is clearly deeply worrying for our industry. The 25% tariff already imposed by the US on single malt Scotch whisky and Scotch whisky liqueurs has already done significant damage to our industry, with exports of Scotch to the US down by more than 25% since October last year.

“The tariffs make Scotch uncompetitive in the US against other spirits and companies are losing sale and market share to competitor products. This is hurting the industry at home as well as threatening the livelihoods of Americans who work in distribution, marketing and hospitality in the US. The loss of on-trade sales as a result of the coronavirus crisis is now making a bad situation worse.

“As economies on both sides of the Atlantic struggle to recover from the coronavirus downturn, now is not the time to hit consumer products once again. Scottish shortbread and cashmere are being damaged too, and British gin – 70% of which is produced in Scotland – is now also under the threat of tariffs.

“The UK, US and EU must focus quickly and constructively on resolving transatlantic trade disputes before jobs are lost and industries scarred, undermining any ‘bounce back’ recovery from Covid-19. For its part, the UK must use the opportunity of the current trade negotiations with the US to resolve the UK-US aspects of these trade disputes.”

The SWA said it would “engage” with the USTR office to express its “strong opposition” to tariffs on Scotch whisky.

“We will continue to work in partnership with the American whiskey industry to urge the UK to follow through on the prime minister’s commitment to remove EU tariffs on US whiskey as soon as the UK can on leaving the EU. In this, we stand shoulder to shoulder with our colleagues in the global spirits industry in calling for all sides to de-escalate and return to zero-tariff trade.”

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