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US Agrees To Suspend Millions Of Pounds In Tariffs On UK Exports Including Scotch Whisky

US Agrees To Suspend Millions Of Pounds In Tariffs On UK Exports Including Scotch Whisky

The UK and the US have come to an agreement which will see 25% tariffs on Scotch whisky dropped (Alamy)

3 min read

The US has agreed to suspend millions of pounds' worth of tariffs on UK exports after the two countries agreed a joint de-escalation of a transatlantic Boeing-Airbus trade war.

As part of the deal, the 25% tariff rate on Scotch whisky will be scrapped entirely for four months in a massive boost to the nation’s largest single food and drink export.

It follows Britain’s decision to suspend tariffs on the American firm Boeing from January, a “show of good faith” the government said which has allowed both countries to work on ending the dispute over state aid for aircraft makers and “focus on deepening our future trading relationship”.

The row goes back to a long-running feud between Boeing and its European rival Airbus, which culminated in a World Trade Organisation ruling which said both firms had received unfair state support.

As a result the then-US president Donald Trump introduced tariffs on £5.6billion worth of goods from the European Union, which affected other sectors not just aerospace.

This was most damaging for the Scotch whisky industry, which had sales to the US worth around £340million before the extra charges were introduced.

In retaliation the EU responded with tariffs on £3 billion of American goods, but once the UK had left the bloc at the start of this year it sought to break ranks by unilaterally suspending them in the hope Washington would reciprocate.

In response to the announcement, the Biden administration has agreed to, the international trade secretary Liz Truss said: "I am delighted to say that our American allies - under their new president and his hard-working staff at the US Trade Representative - have embraced our move to seek a fair settlement.

"The benefits will be felt across our nation, especially in Scotland, where Scotch whisky distillers will be able to sell at lower prices in the United States, their most valuable market.

"The easier it is for Americans to buy a bottle of Macallan, Talisker or Glenfiddich, the more money those producers will have to invest in their businesses, their staff and futures."The Prime Minister Boris Johnson said: "From Scotch Whisky distillers to Stilton-makers, businesses across the UK will benefit from the US decision today to suspend tariffs in this dispute.

“It shows what the UK can do as an independent trading nation, striking deals that back our businesses and support free and fair trade.”

Karen Betts, chief exec of the Scotch Whisky Association, said: “This is fabulous news, and our industry is delighted.  The tariff on Single Malt Scotch Whisky exports to the US has been doing real damage to Scotch Whisky in the sixteen months it has been in place, with exports to the US falling by 35%, costing companies over half a billion pounds. 

“So today, everyone in our industry – from small companies to large – is breathing a sigh of relief.”

Ivan Menezes, cheif executive of the drinks firms Diageo, which owns a number of Scotch whisky brands, said: “Today is a very good day for Scotch and Scotland. We recognise the government’s tireless efforts, using the UK’s newly independent trade policy, to deliver the suspension and hopefully in time, a permanent end to these punitive tariffs.”

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