UK government launches review of US tariffs

28th May, 2021 by Nicola Carruthers

The UK government has started a six-week consultation on US tariffs, which could remove duties on American whiskey.

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The EU and UK currently have a 25% tariff on US goods, including American whiskey

On Monday 24 May, the government launched a public consultation regarding its response to US tariffs on European steel and aluminium, which were enforced by former president Donald Trump in 2018.

The US imposed levies of 25% and 10% on steel and aluminium from EU nations, which at the time included the UK.

In retaliation, the EU introduced a 25% tariff on US goods, including American whiskey. After leaving the EU, the tariff was maintained by the UK at the start of 2021.

The EU tariff on American whiskey was due to double on 1 June, however the move was temporarily suspended just weeks before it was due to come into effect.

The government said its consultation will aim to ensure that future tariffs applied in response to the steel dispute are ‘shaped to UK interests’ and ‘tailored to the needs of the UK economy’.

The UK’s international trade secretary, Liz Truss, has held ‘positive’ talks with the US regarding the matter. She is urging the removal of the tariffs and is hoping to secure a deal that will ‘deescalate the dispute’.

Truss said: “The UK will do whatever is necessary to protect our steel industry against illegal tariffs that could undermine British industry and damage our businesses.

“Ultimately, however, we want to deescalate these disputes so we can move forward and work closely with the US on issues like WTO [World Trade Organization] reform and tackling unfair trade practices by non-market economies.”

The move is part of the government’s goal of progressing to the next step of its trading relationship with the US.

The government is asking UK businesses, industry leaders and stakeholders to provide their input for the consultation, which will close on 5 July.

‘Major impact’

Miles Beale, chief executive of trade body the Wine and Spirit Trade Association (WSTA), said: “As part of its response to US imposed tariffs on steel and aluminium, the UK has been applying rebalancing measures which include a 25% tariff against US Bourbon and whiskey imports. This has had a major impact on our members, due to the interconnected portfolios of global wine and spirit businesses, including on UK marketing and investment opportunities.

“The WSTA has consistently argued that punitive tariffs should not be extended beyond the disputed sector and will continue to advocate that no wines or spirits are part of such a list.

“Given the year that the hospitality industry has had, we should be doing everything we can to support businesses and jobs in our sector. It is time we removed unconnected industries from this dispute and that both sides commit to reaching a rapid resolution.”

In March 2021, the US agreed to temporarily remove tariffs on UK goods, including single malt Scotch whisky, for four months.

The tariffs on Scotch whisky were introduced due to an ongoing dispute between the US and the EU regarding plane manufacturers Airbus and Boeing.

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