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US Tariffs on Scotch Whisky

US Tariffs on Scotch Whisky
A tariff of 25% has been imposed on US imports of Scotch Whisky since October 2019. Learn more about the impact this is having on the Scotch Whisky industry.

Let's Call Time On Tariffs


What’s happening?

Scotch Whisky and American Whiskey distillers are caught in a trade war, which has nothing to do with us.

The Scotch Whisky industry has been hit by a 25% tariff on Single Malt going into the US. The tariff has been in place since October 2019, and Scotch Whisky exports have fallen by 30% Likewise, American whiskey distillers have now had a 25% tariff in place on their exports into the EU for two years, which has meant that their exports have fallen by a third in that time.

While the UK is negotiating a free trade agreement with the US, the tariffs remain in place, with millions being lost in exports every month. Time is running out for the government to get these tariffs removed.

 

 

 

What does that mean?

Scotch Whisky is one of Scotland’s and the UK’s most important industries. We employ 11,000 people in Scotland, and our sector’s supply chain supports 40,000 jobs throughout the UK. Scotch is worth over £5.5bn to the UK economy.

  • Coupled with the impact of COVID-19, the damage that tariffs are causing could result in job losses in the UK and US.
  • Whisky fans see their choices diminish, and favourite products could become harder to find.
  • Whisky tariffs are bad for Scotland’s local communities that rely on free trade with the US to boost the economy. They mean that Scotch will lose market share in the US, which is worth over £1bn to the UK every year.

How can you help?

We’re doing everything we can to ensure that the UK government knows what the Scotch Whisky sector is up against, but you can help, too.

Whether you live and work in the communities for whom Scotch is a lifeblood industry, if you’ve enjoyed a tour or a tasting in one of Scotland’s distilleries, or if you simply enjoy savouring a dram: let your MP know how you feel.

  • Tell them to #CallTimeOnTariffs by urging the UK government to act fast, to negotiate directly with the US to get these unfair tariffs removed before we see more damage.
  • Let them know how important the Scotch Whisky industry is to the economy as we recover from COVID-19

Contact your MP

  1. Find the contact details of your MP by putting your postcode into https://www.writetothem.com/
  2. Your local MP is displayed, click their name
  3. Copy and paste the suggested letter here – please change as necessary
  4. Provide your full name and address – needed when contacting MPs
  5. Send the letter to your MP via email

Tell us you have emailed your MP by emailing info@swa.org.uk so we keep you in touch with our campaign to end tariffs

Tweet your MP

  1. Find the twitter handle of your MP by putting your postcode into https://www.theyworkforyou.com/

  2. Tweet them to let you know you think they should help #CallTimeOnTariffs – remember to include the hashtag!

Time is running out to get US tariffs removed and support #ScotchWhisky

I’ve just written to [insert MP’s Twitter handle] to ask the UK Government to #CallTimeOnTariffs

Learn more from @ScotchWhiskySWA and take action here: http://bit.ly/CallTimeOnTariffs


Overview

In October 2019, a 25% tariff was imposed by the US government on imports of Single Malt Scotch Whisky.  This tariff, and retaliation imposed on additional UK and European products at the same time, was awarded to the US by the WTO under the Boeing/Airbus trade dispute because of subsidies given to Airbus by EU member states including the UK.  Since the tariff was imposed, exports of Scotch Whisky to the US have fallen by more than 30%, amounting to over £200m in lost exports.

The situation is now escalating.  Negotiations between the EU and US to resolve the Airbus/Boeing dispute are not progressing.  The EU is now preparing to impose tariffs on US goods later this summer, again with WTO authorisation.  At the same time, the US government is threatening to raise existing tariffs and to impose more on other goods.  Any increase in the tariff on Single Malts, or the imposition of a new tariff on Blended Scotch Whisky, could be devastating for our industry.  The US is also threatening tariffs on British gin, 70% of which is produced in Scotland.

The UK Government must act swiftly to defend UK interests, including Scotch Whisky.  It must now bring the UK aspects of the Airbus/Boeing dispute and other EU/US trade disputes within the scope of the bilateral trade negotiations that the UK and US governments began on 5 May 2020.  Now the UK has left the EU, it is no longer appropriate for the EU to negotiate in the Airbus/Boeing dispute and other trade disputes on the UK’s behalf.  Instead, the UK government can now forge its own path in resolving these disputes.

Our industry supports the UK-US trade negotiations, believing there is much to be gained for us and other sectors in a good deal with the US.   But clearly tariffs need to be addressed and resolved in these talks too.  The UK government has the opportunity to do this, using the flexibility it has gained on leaving the EU, and distillers are relying on government to grasp this opportunity, otherwise they – and, in particular, SMEs – are going to pay a heavy price.

Read our latest statement (July 2020)

SWA Chief Executive Karen Betts said:  “US tariffs continue to damage Scotch Whisky’s exports to our most valuable market.  Exports to the US have fallen over 30% since October last year when a 25% tariff was imposed on Single Malt Scotch Whisky – amounting to over £200m in lost exports.  This damage has now been compounded by the impact of coronavirus: exports to the US fell 47% in April and 65% in May, compared to exports in the same months in 2019.

“The situation for our industry is severe.  If these sorts of losses are sustained, there will be an impact on the jobs the industry and our supply chain supports, in Scotland and across the UK.  Companies are working as hard as they can to build back from coronavirus lockdowns across our export markets, where bars, restaurants and hotels are starting to reopen and where normal life is starting to resume. 

“But we need urgent government help, too. US tariffs present a strategic, long-term threat to Scotch Whisky’s sales and growth in its most mature market.  Losses in market share that the industry is starting to experience because the tariff makes Scotch uncompetitive against other spirits, including American whiskies, and will take years to rebuild.  So, we need the tariff to be removed as quickly as possible.  The UK has the opportunity to negotiate its removal with the US as part of the ongoing UK-US trade negotiations; as well as the removal of the EU’s tariff on American whiskey as it applies to the UK.  We believe this must be a central part of the next round of talks.  Now the UK has left the EU, the government must use the flexibility of once again having an independent trade policy to draw a line under the UK’s part in EU-US trade disputes and enable Scotch and American whiskies to flourish once again through tariff-free trade.  And time is of the essence – if a resolution is not found to whisky tariffs quickly then the US election will call a halt to negotiations, leaving tariffs in place well into next year and distillers paying a heavy price.”

For more information, please contact pressoffice@swa.org.uk

FAQ: Tariffs

Learn more about tariffs and how they affect international trade for Scotch Whisky producers.

US Tariffs on Scotch Whisky news & commentary

12 August 2020

SWA reaction to USTR tariff notification: Tariff remains at 25%

The SWA's Chief Executive Karen Betts comments on the latest USTR tariff notification in response to the Airbus/Boeing dispute.

28 July 2020

Industry Calls for U.S. and EU to End Trade Dispute Urgently to Save Jobs

17 associations representing beverage alcohol sectors have submitted comments in opposition to the U.S. government’s proposal to impose tariffs on distilled spirits, wine and beer from the EU and UK.

24 June 2020

US Tariffs: SWA comment on latest USTR announcement

Read the latest comment from the SWA on the USTR's recent announcement on the possibility of new tariffs on spirits products.

07 May 2020

SWA Calls for Tariff Elimination as US-UK Free Trade Talks Begin

The SWA has welcomed the formal trade negotiations that have begun this week between the UK and the US governments, and calls for removal of all tariffs on whiskies.

14 February 2020

SWA reaction to USTR tariff notification

The SWA's Chief Executive Karen Betts comments on the latest USTR tariff notification in response to the Airbus/Boeing dispute.

11 February 2020

Scotch Whisky exports surge amidst backdrop of tariff uncertainty

Scotch Whisky exports grew by 4.4% to more than £4.9bn in 2019, with 1.3bn bottles exported to 180 markets.

18 October 2019

SWA calls for end to damaging trade war as 25% tariff to US comes into force

The SWA is calling for support from the UK government following the imposition of a 25% tariff on US imports of Single Malt Scotch Whisky and Liqueurs.

03 October 2019

SWA statement on US Tariffs for Scotch Whisky

The SWA responds to US import tariffs on Scotch Whisky.