US suspends costly tariffs on Scotch whisky
In 2019, the US imposed a 25% tariff on single malt Scotch whisky
The U.S. agreed on Thursday to suspend tariffs on single malt Scotch whisky.
The suspension came after the U.S. and the European Union resolved a long-standing trade dispute over subsidies to Boeing and Airbus earlier this week.
The U.S. first imposed a 25% tariff on single malt Scotch whisky -- Scotland’s main export -- two years ago as part of that trade dispute over aerospace subsidies.
Even though the U.K. is no longer a member of the EU, it belonged to the bloc when the tariffs were originally imposed. The country is also a major participant in Airbus.
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That dispute was resolved earlier this week with a five-year suspension of tariffs on olive oil, cheese and whisky, as well as other products.
In a statement published Thursday, the Scotch Whisky Association said it estimates the industry lost more than $850 million (600 million pounds) in exports to the U.S. during the last two years.
Scotch whisky makers are breathing a sigh of relief after the United States agreed to suspend tariffs on one of Scotland’s main exports. (AP Photo/Hermann J. Knippertz, File)
"This is very good news for Scotch whisky," Karen Betts, the association's chief executive, said in a statement. "This deal removes the threat of tariffs being reimposed on Scotch whisky next month and enables distillers to focus on recovering exports to our largest and most valuable export market."
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A thaw in U.S.-EU relations had been widely expected following the election of President Joe Biden, who made clear his intention to improve ties. In March, Washington agreed to temporarily halt the Trump era tariffs in a bid to negotiate a solution.
Following the U.S.-EU aerospace agreement, British International Trade Secretary Liz Truss and the U.S. Trade Representative Katherine Tai agreed to halt retaliatory tariffs for five years.
Other British industries, including cashmere and construction vehicles, were also affected by the trade dispute, which made exporting to the U.S. harder since October 2019.
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"Today’s deal draws a line under an incredibly damaging issue and means we can focus on taking our trading relationship with the U.S. to the next level, including working more closely to challenge unfair practices by nations like China and using the power of free trade to build back better from the pandemic," Truss said.
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Following Britain's departure from the EU's economic orbit at the start of this year, the U.K. is free to negotiate trade deals with whichever countries it wants.
The Scottish National Party, which runs the devolved administration in Scotland, welcomed the removal of tariffs on Scotch whisky but urged more support from the British government to help businesses that suffered.
"Whilst this announcement is very welcome after months of cross-party campaigning, the losses to Scotch whisky exports have been eye-watering, and it will take time for the industry to get back on its feet," lawmaker David Linden said. "That’s why further support is absolutely vital."
The Associated Press contributed to this report.