Scottish single malt whiskey makers breathed a sigh of relief on Thursday after the United States agreed to suspend tariffs on one of Scotland’s top exports following the resolution of a long trade line between the US and the European Union over subsidies to Boeing and Airbus airlines.
Former U.S. President Donald Trump imposed the 25% tariffs in October 2019 as part of the trade dispute over aerospace subsidies. Although the UK is no longer a member of the EU, it belonged to the bloc when tariffs were introduced.
Earlier this week, the US and EU reached an agreement to end their dispute, paving the way for a five-year suspension of tariffs both sides had imposed on various products, including olive oil. olive and cheese, as well as whiskey.
The Scotch Whiskey Association estimated that tariffs contributed to a 30% drop in total exports to the U.S., equivalent to about 600 million pounds ($ 850 million) in the 18 months to March 2021.
“This agreement removes the threat of re-imposing tariffs on Scotch whiskey next month and allows distillers to focus on recovering exports to our largest and most valuable export market,” Karen said. Betts, executive director of the association.
Following the election of US President Joe Biden, who made clear his intention to improve ties, a thaw in US-EU relations had been expected. In March, both sides agreed to temporarily suspend tariffs linked to the Airbus-Boeing dispute to try to negotiate a solution.
Following the US-EU aerospace agreement, UK Secretary of State for International Trade Liz Truss and US Trade Representative Katherine Tai agreed to stop retaliatory tariffs for five years.
“Today’s agreement marks a line under an incredibly damaging issue and means we can focus on taking our trade relationship with the US to the next level, including working more closely to challenge unfair practices in countries like China and use the power of free trade to build a better return [coronavirus] pandemic, ”Truss said.
Tai said the agreement, in which the two sides also agreed to form a working group on the civil aviation industry and cooperate against “non-commercial practices of third countries,” could be based on “ensuring competition fair and address the challenges of China and other non-market economies ”.
Following the UK’s exit from the EU’s economic orbit earlier this year, it is free to negotiate trade agreements with the countries it wants. Earlier this week, the UK government negotiated the broad outlines of a free trade agreement with Australia that will eliminate tariffs on a wide range of goods in the coming years.
Ivan Menezes, chief executive of beverage giant Diageo, said the removal of Scottish whiskey tariffs and other recent developments illustrate the benefits that can be gained from Brexit.
“With the end of this dispute, a new free trade agreement with Australia that eliminates the remaining tariffs on British liqueurs and the opening of trade talks with India, the world’s largest whiskey market, the new trade policy UK independent now brings great benefits to Scotch and Scotland, ”said Menezes, the company’s single-whiskey whiskey company that includes Talisker and Laphroaig.
The Scottish National Party, which runs the decentralized administration in Scotland, also urged support from the UK government to help businesses that suffered.
“While this announcement is very welcome after months of multi-party campaigns, the losses for Scotch whiskey exports have been impressive, and it will take the industry a while to get back on its feet,” said legislator David Linden.
Under the agreement on Thursday, the UK will suspend for five years tariffs of 25% on US rum, brandy and vodka. US whiskeys, however, will continue to face a 25% tariff in the UK imposed in connection with the EU-US steel and aluminum dispute.
The U.S. Distillated Spirits Council welcomed the deal Thursday and hoped that a resolution could soon be found to raise tariffs on U.S. whiskeys, which it said contributed to a 53 percent drop in exports. in the United Kingdom.
“We hope that this positive momentum will also lead to the rapid and permanent elimination of EU and UK tariffs on American whiskeys,” said the group’s CEO Chris Swonger.
Her Scotch Whiskey Association counterpart Karen Betts said she hoped “they can be resolved quickly, too.”