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Monday, May 20, 2024

25 Months Remain to Avoid Re-run of Damaging 25% Tariff on Scotch Whisky Sales to The United States

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This week (15-17 May) the Scotch Whisky Association (SWA) will visit Washington DC and, alongside the Distilled Spirits Council of the United States (DISCUS), meet with members of Congress and partners in the United States with 25 months remaining to avoid the reinstatement of the 25% tariff on Single Malt Scotch Whisky. 

The 25% tariff on Single Malt Scotch Whisky was levied between October 2019 and March 2021.

Over this 18-month period, the Scotch Whisky industry lost over £600m in exports to the United States – equivalent to over £1m a day.

The tariffs related to an ongoing aerospace dispute over subsides between Airbus and Boeing, and were finally suspended for five years in June 2021.  

The five-year suspension will end in June 2026, and the Scotch Whisky industry fears that it will once again be collateral damage in a trade war not of its making without concerted action by the US and UK administrations to resolve the underlying dispute. 

The SWA and DISCUS is calling on Congress, the US administration and the UK government to make this item number one on the mutual trade agenda following the respective elections taking place in the US and UK this year.  

The SWA will meet members of Congress and work with DISCUS to raise the profile of the issue ahead of the elections, and warn that the end of the suspension period is approaching without a plan for removing Scotch Whisky, and other impacted sectors, from harm.  

Commenting ahead of the visit, SWA International Director Ian McKendrick said:

“The clock is ticking to remove Scotch Whisky from harm over this longstanding aerospace dispute.

“There are 25 months left to eliminate the risk of the 25% tariff being reintroduced, and this issue must be the top of the list of the transatlantic trade agenda once this year’s elections have taken place. 

“The tariffs between 2019 and 2021 were hugely damaging to the Scotch Whisky industry, and to our supply chain partners which extend into the US, especially the trade in casks.

“Over £1m a day in lost exports was a high price for the Scotch Whisky industry to pay for an unrelated aerospace dispute.  

“A re-run of these damaging tariffs must be avoided.

“We look forward to meeting members of Congress to discuss how we can safeguard Scotch Whisky in the industry’s largest global market, and call time on Scotch Whisky tariffs for good.” 

Chris Swonger, President and CEO of the Distilled Spirits Council of the United States, said: 

“Nearly two years ago, distillers in the United States and Scotland jointly toasted the U.S. and the UK governments for reaching important agreements that secured the removal of retaliatory tariffs on Single Malt Scotch Whisky and American Whiskeys in separate trade disputes wholly unrelated to the distilling sector. 

“These agreements have been instrumental in resetting the crucial trading relationships between the U.S. and UK, benefitting consumers and producers on both sides of the Atlantic. 

“If an agreement is not reached by June 2026, the 25% U.S. tariff on Single Malt Scotch will return, dampening the recovery of the hard-hit hospitality sector as it emerges from the COVID-19 pandemic.   

“We call on both nations to prioritise reaching an agreement in the WTO Large Civil Aircraft dispute to permanently remove retaliatory tariffs on Single Malt Scotch Whisky once and for all.” 

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