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US suspends Scotch whisky tariffs in UK deal

Scotch whisky fans in the US have been given a reason to celebrate after the Biden administration said it was suspending extra import tariffs imposed on UK goods within the wider trade dispute over Boeing and Airbus.

US Scotch whisky tariffs imposed due to a long-running trade dispute will be suspended from 8 March, back-dated to yesterday (4 March), the UK government has announced.

The 25% US levy on Scotch imports was imposed in October 2019 as part of $7.5bn of retaliatory tariffs on European goods; the fallout from a wider trade dispute between the US and EU on aerospace industry subsidies.

Within that Airbus-Boeing dispute, tariffs on all UK products have been halted for four months to give British and American negotiators time to agree a deal.

There’s no let-up on related US import tariffs for European wines, however. The UK has pursued its own resolution since Brexit.

‘From Scotch Whisky distillers to Stilton [cheese] makers, businesses across the UK will benefit from the US decision today to suspend tariffs in this dispute,’ said UK prime minister Boris Johnson.

Scotch whisky tariffs have hit shipments

The news could also benefit Scotch whisky drinkers in the US, too.

Shipments of Scotch across the Atlantic have fallen off significantly since October 2019.

‘This is fabulous news, and our industry is delighted,’ said Karen Betts, CEO of the Scotch Whisky Association.

‘The tariff on single malt Scotch whisky exports to the US has been doing real damage to Scotch whisky in the 16 months it has been in place, with exports to the US falling by 35%, costing companies over half a billion pounds.’

The US move comes after the UK dropped retaliatory tariffs against American firm Boeing in January.

Betts praised the UK government and said she hoped a long-term agreement could be made.

She also added, ‘We hope too that both governments will be able to find a rapid, pragmatic solution to the steel and aluminium dispute which still impacts US whiskey exports to the UK.’

Ivan Menezes, CEO of spirits giant Diageo, said, ‘Today is a very good day for Scotch and Scotland. We recognise the Government’s tireless efforts, using the UK’s newly independent trade policy, to deliver the suspension and hopefully in time, a permanent end to these punitive tariffs.’

Will wine tariffs be next?

It is hoped in the trade that the new president Biden-led administration might also halt added import tariffs on some EU wines, from Bordeaux to Rioja.

Those tariffs are part of the same aerospace dispute.

In the US, the National Association of Beverage Importers (NABI) has called for a six-month suspension to tariffs imposed by both the EU and US in relation to the fallout over state aid for rival firms Airbus (EU) and Boeing (US).

NABI cited reason for optimism last week after Katherine C. Tai, Biden’s pick as the new US Trade Representative, reportedly told a Senate Finance Committee confirmation hearing that the ‘US and EU must come together to find an answer’.

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