Tariff suspensions boost for Scotch whisky exports

Tariff suspensions boost for Scotch whisky exports

The big news for the whisky market in Q2 has been the dual suspension of US tariffs and Australia’s removal of import duties on Scotch. In June President Biden’s administration agreed to halt the 25% tariff on Scotch whisky for five years. The tariffs were first imposed by Donald Trump on specific goods from the EU and the U.K. including wine, single malt Scotch whisky, machinery, and cashmere.

“The past two years have been extremely damaging for our industry,” said the Scottish Whisky Association’s chief executive Karen Betts, “with the loss of over £600 million in exports to the United States caused by a 25% tariff on single malt Scotch whisky imposed as a result of the long-running dispute between US and European aircraft manufacturers. 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.”

Although it will take time for exports to the US to recover to pre-tariff levels, this move is excellent news for Scottish distilleries who have seen their exports to the US fall by 35% over the last two years. June also saw an in-principle trade deal reached between the Australia and the U.K. which aims to reduce restrictions on imports on various goods. Although the exact details are yet to be thrashed out, the UK’s International Trade Secretary Liz Truss is seeking to remove tariffs on whisky.

The potential deal is yet more welcome news for producers beset by Brexit woes and the impact of US tariffs. It is hoped that lower costs for exporters and producers would translate into lower prices for Australian customers, providing a much-needed boost to Scotch sales in that country. Australia is currently the 8th largest export market for Scotch with a total value of £113 million and previously set import duties on Scotch at 5%.

“The FTA is also an opportunity to strengthen the legal protection of Scotch Whisky in Australia,” commented the SWA’s chief executive Karen Betts, “and to improve its enforcement. Stopping those who seek to take advantage of the quality reputation of Scotch Whisky with counterfeit Scotch is a priority for us in Australia, as it is in all our export markets.”

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