Scotch whisky losses hit £500m in crossfire of aerospace trade war

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Exports of Scotch whisky to the US have dropped by more than a third since the Donald Trump administration imposed tariffs just over a year ago in an unrelated trade war, newly published figures show.  

The 25% tariff was introduced in October 2019 “in retaliation for EU state support given to Airbus”, but has cost whisky exporters a total of £500m, The Guardian reports. 

The Scotch Whisky Association (SWA) says distillers are “continuing to pay the price for an aerospace dispute that has nothing to do” with them.

Calling for the immediate suspension of all tariffs on unrelated sectors, the trade body’s chief executive, Karen Betts, warned that “the current situation is unsustainable”.

The cost of lost exports is “being borne by large and small producers alike, who are losing sales and market share in what has been for decades the industry’s largest and most valuable market, which they may never now recover”, she added.

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The Scotch whisky industry is worth more than £5.5bn to the UK economy. The sector employs 11,000 people in Scotland, while the related supply chain supports a total of 40,000 jobs across the UK. 

Despite those high stakes, the UK government last month failed to conclude a “mini-deal” with the US that would have removed tariffs on Scotch whisky and other products caught up in the dispute.

The SWA is now urging Downing Street officials to work with the Joe Biden administration to resolve the trade spat.  

“The UK government must now act urgently and call for the immediate suspension of all tariffs on unrelated sectors and, at the same time, redouble efforts with the new US administration to resolve the aerospace dispute and lift tariffs permanently,” said Betts.

“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.”