Trump puts 25% tariff on Scotch whisky

October 3, 2019 | Scotland

New trade tariffs imposed on exports of single malt whisky have been slated by the Scotch industry.

Single malt Scotch whisky exported to the United States will now face a tariff of 25% following a ruling by the World Trade Organisation.

The 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, olives, biscuits, books, and some machinery.

Scotch whisky exports to the US were worth $1.3bn (£1bn) last year.

Karen Betts, chief executive of the Scotch Whisky Association said: ‘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.

Karen Betts (Photo: Scotch Whisky Association)

‘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 Malt Whisky Trail in Speyside includes seven whisky distilleries producing single malt whisky including the world’s top two best selling single malt brands, Glenfiddich and The Glenlivet. Both are extremely popular in the US.

Chair of the Malt Whisky Trail James Johnston OBE said: ‘This ruling is unwelcome but the quality, consistency and character of the Speyside malt defines the uniqueness of a product which will continue to stand up in economically challenging situations.

Chair of the Malt Whisky Trail James Johnston

‘The Scottish food and drink sector has grown three times faster than the rest of the Scottish economy over the past decade and is responsible for over half of all manufacturing jobs along the Malt Whisky Trail.

‘It is particularly concerning to see that this judgement will also impose a tariff on cashmere given the fact that Johnston’s of Elgin is another major employer in the region and specialises in fine cashmere clothing.

‘However the remarkable growth of the sector is down to its success in opening up new overseas markets, underpinned with unquestionably high-end products. Keeping it all in context, whilst the US may impose new tariffs, sales to new markets such as China and the Middle East are booming.’