Scottish whiskey manufacturers welcome the suspension of costly US tariffs

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LONDON (AP) – Scotch single malt whiskey makers breathed a sigh of relief Thursday after the United States agreed to suspend tariffs on one of Scotland’s major exports after settling a long-running trade dispute between the US and the EU over subsidies to aircraft companies Boeing and Airbus.

President Donald Trump imposed tariffs of 25% in October 2019 as part of the trade dispute over subsidies for the aerospace industry. Great Britain is no longer a member of the EU, but it was part of the bloc when the tariffs were introduced.

Earlier this week, the US and EU reached an agreement to end their dispute and paved the way for a five-year suspension of tariffs both sides had imposed on a number of products, including olive oil and cheese, and whiskey.

The Scotch Whiskey Association estimates that tariffs contributed to a 30% decrease in total exports to the United States, equivalent to about 600 million pounds ($ 850 million), in the 18 months ending March 2021.

“This deal removes the risk of tariffs being re-imposed on Scottish whiskey next month and allows distillers to focus on regaining exports to our largest and most valuable export market,” said Karen Betts, the association’s executive director.

A thaw in US-EU relations was widely expected following the election of President Joe Biden, who made clear his intention to improve relations. In March, both sides agreed to temporarily suspend tariffs in connection with the Airbus-Boeing dispute in order to negotiate a solution.

Following the US-EU aerospace deal, UK Foreign Trade Secretary Liz Truss and US Trade Representative Katherine Tai agreed to suspend retaliatory tariffs for five years.

“Today’s deal puts an end to an incredibly damaging topic and means we can focus on taking our trade relations with the US to the next level, including working more closely to combat unfair practices by nations like China Use the power of free trade to build up. “Better get back from the pandemic,” said Truss.

Tai said the agreement, in which the two sides also agreed to set up a working group on the civil aviation industry and work together against “non-market practices in third countries”, can build on “ensuring fair competition and addressing common challenges.” China and other non-market economies. “

After Britain’s exit from the EU’s economic orbit earlier this year, it is free to negotiate trade deals with any country. Earlier this week, the UK government negotiated the outline of a free trade agreement with Australia that will abolish tariffs on a wide variety of goods in the coming years.

Ivan Menezes, CEO of drinks giant Diageo, said the removal of tariffs on Scottish whiskey and other recent developments illustrate the benefits that Brexit can bring.

“With the end of this dispute, a new free trade agreement with Australia that removes the remaining tariffs on British spirits, and the start of trade talks with India, the largest whiskey market in the world, the UK’s new independent trade policy now brings great benefits.” Scotch and Scotland, ”said Menezes, whose single malt whiskeys also include Talisker and Laphroaig.

The Scottish National Party, which runs the decentralized administration in Scotland, has called for more support from the UK government to help businesses that are suffering.

“While this announcement is very welcome after months of bipartisan campaigning, the losses in Scottish whiskey exports have been staggering and it will be some time before the industry gets back on its feet,” said lawmaker David Linden.

Under Thursday’s agreement, the UK will suspend 25 percent tariffs on US rum, brandy and vodka for five years. However, American whiskeys continue to face a 25% UK duty imposed in connection with the EU-US steel and aluminum dispute

The United States’ Distilled Spirits Council welcomed Thursday’s deal, hoping a solution can be found soon to its own tariffs, which have contributed to a 53% drop in exports to the UK

“We hope that this positive momentum will also lead to the immediate and permanent abolition of EU and UK tariffs on American whiskeys,” said Group CEO Chris Swonger.

His counterpart in the Scotch Whiskey Association, Karen Betts, said she hoped these “can be resolved quickly” too.

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Follow all AP stories about Brexit and UK politics at https://apnews.com/Brexit



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