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Scotch whisky’s losses from US tariffs hit £500m

whisky bottles

A slump in whisky sales is ‘unsustainable’

Scotch Whisky leaders say losses resulting from the US tariffs imposed in the trade dispute with the EU have hit £500m and are causing long-term harm to the industry.

A 25% levy was imposed on the single malt category in October 2019 which led to a 35% slump in exports to the US.

Hopes of a resolution were dashed last month when the UK government failed to conclude a ‘mini-deal’ with the US which would have removed tariffs on scotch whisky and other products, such as cashmere, which have been caught up in the dispute.   

It centres around subsidies provided to Airbus and Boeing respectively by European governments, including the UK, and by the US government, which were found to be illegal by the World Trade Organisation (WTO). 

The SWA is urging the UK government to call for the immediate suspension of all tariffs on unrelated sectors.

At the same time, the SWA says the UK must work to resolve the aerospace dispute by addressing UK violations of WTO rules on subsidies and by agreeing a future regime of support to aerospace with the US – as soon as the new US Trade Representative assumes office – that is WTO compliant.  

The SWA is also calling for support to the industry, given the level of losses, including a cut to excise duty in the March budget and a sustained push to reduce the basic customs duty in India, which is currently 150%. 

Karen Betts, chief executive of the Scotch Whisky Association, said: “The current situation is unsustainable,” adding that producers “are losing sales and market share in what has been for decades the industry’s largest and most valuable market, which they may never now recover.

“It’s very hard for Scotch Whisky producers to understand why the UK government is so unwilling to address the UK violations of WTO rules on aerospace subsidies at the root of the tariffs. 

“Distillers are suffering terrible losses and still the government, after 16 years of unsuccessful litigation, is unprepared to take the necessary steps to ensure subsidies comply with the UK’s international obligations.”

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