WHISKY exports “may never recover” as US tariffs cost the sector half a billion pounds, leaders say. Single malt Scotch has been subject to a 25% import tariff since October 2019. It was introduced by the Trump administration as part of a trade dispute with the European Union over aircraft subsidies.

Scottish producers have now seen exports to the US – a key market – tumble by 35%.

Total losses add up to more than £500 million of business and the Scotch Whisky Association (SWA) fears rebuilding that market share could take years – if it is even possible at all.

There was hope last month that a mini-deal between the UK and US would see the tariffs removed. However, this failed and the SWA is now calling for immediate action by Westminster. Chief executive Karen Betts said: “The current situation is unsustainable. Since tariffs were put in place, our exports to the US have fallen by 35%, amounting to over half a billion pounds in lost exports. This 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.”

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The SWA says distillers are “continuing to pay the price for an aerospace dispute that has nothing to do with Scotch Whisky”. That dispute centres around subsidies provided to Airbus and Boeing respectively by European governments, including the UK, and by the US government, which were found to be illegal by the World Trade Organisation (WTO). The SWA wants Westminster to agree a WTO-compliant regime of support to aerospace with the US as soon as possible. It is also calling for a cut to excise duty in Rishi Sunak’s March Budget and a “sustained push” to reduce the basic customs duty in India, which is currently 150%.

Betts 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 UK Government must 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.

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“The Government must also offer some support to distillers, who are shouldering tariff losses alongside dealing with unprecedently difficult trading conditions as a result of Brexit and global restrictions to curb Covid-19 transmission.”

The Department for International Trade said: “The Secretary of State for International Trade has led intensive talks with the US to get these unfair tariffs on UK exports removed. We will continue to push hard for a resolution that works for the whole of the UK, including our brilliant Scotch Whisky producers. We have a clear strategy in place to de-escalate the dispute and we will work with the new US administration at the earliest opportunity to find a solution.”