The Scotch whisky industry fears its sales will be hit hard after the White House announced plans to put 25 percent tariffs on US imports from the European Union.
So while the Scottish National Party (SNP) and its leader Nicola Sturgeon clamour for Britain to stay in the EU, whisky distillers are hoping the UK leaves on 31 October, leaving their exports to the US tariff-free.
Washington was given the go-ahead by the World Trade Organization to impose tariffs in retaliation over state subsidies for European aircraft manufacturer Airbus.
The tariffs, which will affect around US$460 million worth of EU exports to the US including French wine and Italian cheese, are due to come into effect from 18 October.
Drinks industry source baffled that US tariffs will hit scotch whisky but not french champagne or brandy. US could have been helpful to UK business - chose not to be. "what does that suggest about future trade negotiations after UK contortions to keep all of UK out of CU"
— Simon Jack (@BBCSimonJack) October 3, 2019
Karen Betts, Chief Executive of the Scotch Whisky Association, said: “We are very disappointed that the US government has announced a tariff of 25 percent on imports of single malt Scotch whisky and liqueurs from the UK. This is a blow to the Scotch whisky industry. Despite the fact that this dispute is about aircraft subsidies, our sector has been hit hard, with single malt Scotch whisky representing over half of the total value of UK products on the US government tariff list.”
Ms Betts said the US was Scotch whisky’s most valuable export market, with sales of £1 billion last year.
She said: “The tariff will put our competitiveness and Scotch whisky’s market share at risk. We are also concerned that it will disproportionately impact small producers. We expect 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. We believe the tariff will also have a cumulative impact on consumer choice.”
Breaking: US imposing 25% on French wine, single-malt Scotch whisky as part of response to EU aircraft subsides pic.twitter.com/Z5fMNwPCoq
— David Shepardson (@davidshepardson) October 2, 2019
Ms Betts said: “For the last 25 years trade in spirits between Europe and the US has been tariff-free. In that time, exports of Scotch whisky to the US and of American whiskey to the UK and Europe have grown significantly, benefiting communities on both sides of the Atlantic, boosting investment, employment and prosperity for all.”
She said: “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, to ensure that these latest tariffs are not implemented on 18 October, and to ensure that other tariffs - including on the export of American whiskey to the EU - are removed quickly. 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.”
Think France drinks Cognac? Last year the French drank *40 times* as much Scotch Whisky. They import more whisky from Scotland than France exports brandy worldwide.
— Alan Ferrier (@alanferrier) October 3, 2019
In 1994 Britain exported £280 million worth of Scotch whisky to the US, but that rose to £1 billion by last year - a third of which are single malts like Laphroaig, Glenfiddich, Glenlivet and Talisker.
Since Donald Trump entered the White House he has triggered several trade wars - most notably with China and Canada - claiming he was standing up for US industry.
He is furious that Airbus - the main competitor for US manufacturer Boeing - receives state subsidies from some European countries, notably France.
Ironically while Scotch whisky will be subjected to 25 percent tariffs, sales of Airbus planes would only get a 10 percent tariff slapped on them.
Get ready to pay more for Irish whiskey, single-malt Scotch, just when you might be driven to drink more. French wines, too, will cost more. Coffee, biscuits, olives, cheese, things you like to eat will be hit with a 25% tariff because Trump is a moron.
— Barbara Malmet (@B52Malmet) October 3, 2019
Airbus has a factory in Alabama and parts being imported from the EU for use in that plant will not be affected.
Scotland’s First Minister, Nicola Sturgeon, said the tariffs on Scotch whisky were “profoundly worrying”.
She said: “It’s in nobody’s interests to have trade wars like this, everyone ends up being a loser, and the sooner we find a resolution the better and I would encourage UK ministers to work hard to do so.”
I’m proud to have worked with President @realDonaldTrump to get a good trade deal that benefits Alabama workers at Airbus in Mobile. While some attack our President on trade, I’m working with him to make sure American workers always come first! https://t.co/UyJth5F7rt
— Bradley Byrne (@BradleyByrne) October 5, 2019
The Green Party in Scotland urged her to retaliate against President Trump by suspending the US military’s right to use Prestwick Airport, near Glasgow.
The Scotch Whisky Association has been opposed to a no-deal Brexit which it said “would cause the Scotch whisky industry considerable difficulties” and it welcomed Theresa May’s Brexit withdrawal deal as a “positive step towards much needed business certainty”.
Exports of Scotch whisky account for around 93 percent of production.
