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Trump-era whisky tariffs hammer Scotch exports by £500m

Lucy Harley-McKeown
·2-min read
LONDON, ENGLAND - OCTOBER 23: A bar tender pours 12 years old Macallan highland single malt scotch whisky during the RM Sotherb's London, European car collectors event at Olympia London on October 23, 2019 in London, England. RM Sotheby's London, billed as the annual highlight for European car collectors will show Edwardians to modern supercars and offers collectors and attendees the opportunity to experience the very best of European cars. Sotheby’s will also present The Ultimate Whisky Collection, the most valuable collection of whisky ever to be sold at auction, both events will culminate in live auctions on 24th October.  (Photo by John Keeble/Getty Images)
Historic tariffs are hammering the sector. Photo: John Keeble/Getty Images

The Scotch whisky industry is facing up to £500m ($684m) in lost exports because of a trade spat which originated during Donald Trump’s US presidency.

According to new figures from the Scotch Whisky Association (SWA), shipments of single malt to the US have fallen by more than a third since the administration imposed tariffs on the drink.

The 25% tariffs, brought in in October 2019, were part of a range of European products targeted as part of a row over government subsidies given to Airbus (AIR.PA) and Boeing (BA).

The SWA said: “These tariffs are not only causing short-term losses to the industry, but also long-term harm to the Scotch Whisky category, since the market share lost as a result of tariffs could take years to rebuild.”

Products such as the fabric cashmere have also been caught up in the dispute, which it was hoped would be resolved by the UK government last month in a “mini-deal.”

The SWA also called for further support to the industry, given the level of losses, including a cut to excise duty in the March budget and a sustained push to reduce the basic customs duty in India, which is currently 150%.

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Karen Betts, CEO of the SWA, said: “It’s very hard for Scotch Whisky producers to understand why the UK government is so unwilling to address the UK violations of WTO rules on aerospace subsidies at the root of the tariffs.

“Distillers’ are suffering terrible losses and still the government, after 16 years of unsuccessful litigation, is unprepared to take the necessary steps to ensure subsidies comply with the UK’s international obligations.

“The government must also offer some support to distillers, who are shouldering tariff losses alongside dealing with unprecedented difficult trading conditions as a result of Brexit and global restrictions to curb COVID-19 transmission. As part of this, the chancellor must deliver a package of support for the industry, including a cut to spirits duty in next month’s budget.”

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