US whisky tariffs leave Scottish distilleries vulnerable

Scottish whisky distillers are facing a 25% tariff on single malt exports to the US as trade tensions heighten between the EU and US.

On Wednesday the World Trade Organisation (WTO) ruled to allow the US to introduce £6.1 billion in tariffs on EU imports, which could be active from as soon as the 18th of October. As well as other EU exports such as, cheese, clothes and wine, Scotch single malt whisky is at risk from this spike in tariffs. For the last 25 years spirit trades between the EU and US have been tariff free, meaning this jump leaves the industry largely vulnerable, with small independent distilleries who largely rely on exports being threatened the most. Although the US had initial intentions for a £8.9 billion tariff on goods, the WTO reduced the sum to £6.1 billion. Regardless, Wednesday’s verdict still marks the largest penalty of its kind.

The tariffs come as a retaliation from the US from after an on-going trade dispute between the EU and US peaked. The US claim that the EU has been subsidising low-cost loans to EU aircraft manufacturers Airbus. The US asserts that the EU’s subsidies to Airbus are illegal and have hindered their aerospace industry.

The Chief Executive of the Scottish Whisky Association (SWA), Karen Betts, addressed the issue saying that the SWA expects “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.”

Betts then urged the US and EU “not to draw spirits into trade disputes that have nothing to do with our sector.”

She then proceeded to express the SWA’s want for this conflict to be resolved saying, “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.

“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.”

Last year Scotch whisky exports to the US reached £1 billion, and although the tariffs will not affect the export of whisky blends, single malts are the most valuable of Scotland’s whisky exports and equate to a third of Scotch whisky exports to the US.

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