Scotch whisky distillers toast end to high U.S. tariffs on single malts

Scotch whisky makers breathed a sigh of relief Thursday after the United States agreed to suspend tariffs on one of Scotland's main exports following the resolution of a long-standing trade row between the U.S. and the European Union over subsidies to aircraft companies Boeing and Airbus.

President Donald Trump slapped a 25% tariff on single-malt Scotch whisky in 2019 as part of the trade dispute over aerospace subsidies. While the U.K. no longer is an EU member, it belonged to the bloc when the tariffs were imposed and is a major participant in Airbus.

Earlier this week, the U.S. and the EU reached an agreement to end their dispute. The breakthrough paved the way for a five-year suspension of tariffs both sides had placed on an array of products that have nothing to do with aircraft, including olive oil and cheese, as well as whisky. The Scotch Whisky Association estimated the tariffs caused more than $850 million worth of lost exports to the U.S..

"This is very good news for Scotch whisky," Karen Betts, the association's chief executive, said. "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."

A thaw in U.S.-EU relations had been widely expected following the election of President Joe Biden, who made clear his intention to improve ties. In March, Washington agreed to temporarily halt the Trump-era tariffs in a bid to negotiate a solution.

Following the U.S.-EU aerospace agreement, British International Trade Secretary Liz Truss and the U.S. Trade Representative Katherine Tai agreed to halt retaliatory tariffs for five years.

Other British industries, including cashmere and construction vehicles, were also affected by the trade dispute, which made exporting to the U.S. harder since October 2019.

"Today's deal draws a line under an incredibly damaging issue and means we can focus on taking our trading relationship with the U.S. to the next level, including working more closely to challenge unfair practices by nations like China and using the power of free trade to build back better from the pandemic," Truss said.

Following Britain's "Brexit" departure from the EU's economic orbit at the start of this year, the U.K. is free to negotiate trade deals with whichever countries it wants.

The Scottish National Party, which runs the devolved administration in Scotland, welcomed the removal of tariffs on Scotch whisky but urged more support from the British government to help businesses that suffered.

"Whilst this announcement is very welcome after months of cross-party campaigning, the losses to Scotch whisky exports have been eye-watering, and it will take time for the industry to get back on its feet," lawmaker David Linden said. "That's why further support is absolutely vital."