- UK Prime Minister Boris Johnson spoke out against the 25% tariff on Scotch whisky exports to the US in Parliament, saying that “we will fight it every step of the way.”
- The US introduced the tariff in October 2019 in retaliation against subsidies that EU member states gave to Airbus.
- The tariff has made Scotch whisky less competitive in the US, and caused sales to plummet, according the the Scotch Whisky Association. In May 2020, exports to the US were 65% lower than the same month last year.
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The 25% tariff on Scotch whisky exports to the US should be lifted, British Prime Minister Boris Johnson said.
“We will continue to take a very robust line. It cannot be right that American consumers should continue to pay over the odds for Scotch (whisky),” he told Parliament on Wednesday.
“It cannot be right that this discrimination should continue and we will fight it every step of the way,” the prime minister said.
He had already brought the matter up several times with President Donald Trump, he added.
The US introduced a 25% tariff on single malt Scotch whisky exports to the US in October 2019. It was introduced in retaliation against subsidies EU member states gave to aircraft maker Airbus.
In 2019, more than a fifth of the Scotch whisky industry’s export revenue came from the US. This made the US the industry’s biggest market with sales of over £1 billion ($1.3 billion), according to the Scotch Whisky Association (SWA), the industry’s trade body.
But sales fell sharply after the tariff made it less competitive, the SWA said. Exports to the US dropped 30% from October 2019 to July 2020, causing losses of around £300 million ($386 million), which has been compounded by the pandemic, the SWA said.
In May 2020, exports to the US were 65% lower than the same month last year.
This could result in job losses, the SWA warned. The Scotch whisky industry employs more than 11,000 people in Scotland and its supply chain supports around 40,000 jobs in total in the UK, the trade body said. The tariff may also threaten US jobs in distribution, marketing, and hospitality.
“In these difficult times, trade disputes and tariffs are compounding the damage to businesses,” Karen Betts, SWA chief executive, said. “Scotch whisky and American whiskey distillers, bars and restaurants need to find ways through the human and economic crisis brought on by COVID-19. Removing tariffs on whiskies would be very significant for us right now.
American whiskey distillers have also had a 25% tariff in place on their exports into the EU since June 2018. Their exports have since dropped by a third.