SWA urges ‘swift’ removal of tariffs during UK-US trade talks



Nicola Carruthers|The Spirits Business

The US imposed a 25% import tariff on a number of EU goods, including single malt Scotch whiskey, 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 aircraft to lose sales and market share, thus affecting revenue for US producers and jobs for US workers.

The SWA said that since the tariff was imposed, exports of Scotch whiskey to the US have declined by more than 30%. Export figures for the second quarter of 2020 are not yet available.

The SWA’s chief executive, Karen Betts, said: “US tariffs continue to damage Scotch whiskey’s exports to our most valuable market. Exports to the US have fallen over 30% since October last year when a 25% tariff was imposed on single malt Scotch whiskey – amounting to over £200m [US$251m] in lost exports. This damage has now been compounded by the impact of coronavirus: exports to the US fell 47% in April and 65% in May, compared to exports in the same months in 2019.”

Last month, 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.

The SWA said the UK government must now “act swiftly to defend UK interests” by bringing the UK facets of the aircraft dispute and other EU/US spats within the scope of the trade talks between the US and UK that began on 5 May 2020.

The trade group said there would be a number of benefits for the Scotch industry and other sectors if a “good deal” is secured with the US. The UK has the chance to resolve the tariffs dispute “quickly and directly” within these talks “using the flexibility it had gained on leaving the EU”, otherwise, distillers will “pay a heavy price”, the SWA warned.

The SWA warned that the Scotch industry is in a “severe” situation and a sustained fall in exports could affect the supply chain. The Scotch whiskey sector employs 11,000 people in Scotland.

Betts said: “If these sorts of losses are sustained, there will be an impact on the jobs the industry and our supply chain supports, in Scotland and across the UK. Companies are working as hard as they can to build back from coronavirus lockdowns across our export markets, where bars, restaurants, and hotels are starting to reopen and where normal life is starting to resume.”

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