US tariffs on Scotch whisky suspended for 5 years

The Scotch Whisky Association (SWA) has welcomed the UK-US deal on future aerospace subsidies which further suspends tariffs on Scotch whisky for five years.

Britain and the US on Thursday said they had agreed a deal to resolve the trade dispute over Airbus and Boeing for the next five years, ensuring retaliatory tariffs remain suspended.

“This is very good news for Scotch whisky,” Karen Betts, chief executive of the SWA, commented.

“The past two years have been extremely damaging for our industry, with the loss of over £600m in exports to the US caused by a 25 per cent tariff on single malt Scotch whisky imposed as a result of the long-running dispute between US and European aircraft manufacturers. 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.”

Betts urged both governments and aerospace companies on both sides to work with one another constructively to fully resolve the underlying dispute.

“I want to note too that American whiskies remain subject to tariffs on entry into the UK and EU as a result of a separate dispute on steel and aluminium, and we hope these tariffs can also be resolved quickly,” she added.

The UK-US agreement comes two days after the EU also announced truce in their near 17-year conflict over aircraft subsidies, suspending for five years one set of Trump-era tariffs which had soured relations with the US. Thursday's agreement achieves many of the same results as the EU-US deal.

“This deal will support jobs across the country and is fantastic news for major employers like Scotch whisky and sectors like aerospace. We took the decision to de-escalate the dispute at the start of the year when we became a sovereign trading nation, which was crucial to breaking the deadlock and bringing the US to the table,” International Trade Secretary Liz Truss said.

The UK, which was involved as a member of the EU, took the decision to deescalate the dispute by unilaterally suspending retaliatory tariffs on the US at the start of this year, which encouraged the US to agree to a four-month suspension of tariffs while both sides negotiated a longer-term arrangement.

The dispute, the longest-running in the history of the World Trade Organization (WTO), has seen damaging retaliatory tariffs levied on products on both sides of the Atlantic due to disagreements over support for large civil aircraft, hitting industries such as cashmere, machinery, and single malt Scotch whisky.

The US and EU had been battling since 2004 in parallel cases at the WTO over subsidies for US planemaker Boeing and European rival Airbus, which each argued exposed the other to unfair competition.