Implemented on 18 October, the whisky-related charges are part of broader £6.1bn tariffs the US has slapped on EU exports in response to what the World Trade Organisation (WTO) has now agreed are illegal subsidies the bloc paid France-based aerospace manufacturer Airbus. The US claims this damaged its own airline operators.
According to SWA chief executive Karen Betts, Scotch whisky would pay 60% of the UK's tariff bill, eight times more than the next most valuable product on the tariff list.
“That single malts are being targeted is particularly damaging for smaller producers, who stand to be the hardest hit,” said Betts.
Undermining years of work
“Scotch whisky has been imported tariff-free to the US for the last 25 years. This move undermines decades of hard work and investment, which has seen Scotch whisky sales boom in the US. It will impact both our industry and its supply chain.”
Exports of single malt Scotch whisky were predicted to drop 20% in the next 12 months due to the levy, as UK distillers become less competitive in the US market.
“In Scotland and throughout our UK supply chain, we expect to see a dropping-off in investment and productivity. Ultimately, jobs could be at risk,” Betts continued.
Betts called for support from the UK government to negotiate a solution to trade disputes that have led to “tit-for-tat” tariffs and ensure duty-free trade can continue between the UK and the US.
'Weather the storm'
“We now need the UK and Scottish governments to work together to ensure distillers can weather the storm,” she added. “We want them to consider a range of support to the industry, including reducing the UK tax burden on Scotch whisky in the Autumn Budget. This will provide an important lifeline while efforts continue to remove the tariffs.”
Betts urged Government to not sleep on the issue as it focused on other mounting pressures, not least of all Brexit. At risk is the highly valuable export success of Scotch whisky, which reached a record high in February this year – up 7.8% to £4.7bn.
“This is now at risk if Government strategy does not urgently use all the powers at its disposal to remove these damaging tariffs,” Betts concluded.
Meanwhile, trade union GMB Scotland also hit out at the tariffs, which it described as a “troubling glimpse into the post-Brexit future”, adding they would squeeze the UK economy.