Scotch Whiskey Makers Denounce UK Government Inaction on US Tariffs | Business

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The Scotch whiskey industry has attacked the UK government for its “inexplicably slow” action against the high tariffs imposed on whiskey imports by the US government.In an unusually critical statement, the Scotch Whiskey Association accused British ministers of prioritizing post-Brexit trade negotiations with the United States rather than tackling the 25% tariffs imposed on Scotch whiskey and other products by the United States last October, in a dispute over European subsidies for the aircraft manufacturer Airbus.

Late Wednesday night, it emerged that the United States had lifted tariffs on shortbread and other products, after intense lobbying by Liz Truss, the United Kingdom’s secretary for international trade, in the last round. bilateral negotiations on a new trade agreement. The United States has also abandoned plans to impose tariffs on blended whiskey and British gin, 70% of which is made in Scottish distilleries.

But the SWA was furious that the 25% tariff was withheld on malt whiskey and Scotch whiskey liqueurs like Drambuie. The United States is one of the industry’s biggest markets, worth almost £ 1.1 billion last year, with malt whiskey making up about a third of that.

Karen Betts, chief executive of SWA, said the tariffs had already caused “enormous damage” to the industry. This had led to the loss of £ 300million in sales in the United States, with some companies withdrawing entirely from the United States, adding to the sales crisis caused by the coronavirus pandemic.

Truss’s visit to the United States last week to pressure Robert Lighthizer, the US trade representative who heads his government’s trade deal negotiations, “was clearly too little, too late,” Betts said.

“The British government must speed up negotiations to end tariffs between the United Kingdom and the United States before the preparations for the presidential election in November put an end to the negotiations,” she added. . “It took the UK government six full months after the UK left the EU to start tackling tariffs directly with the US government, which we find inexplicably slow.

“The UK government must now focus its energy on developing a clear strategy to resolve the UK’s share in the Airbus-Boeing disputes and the steel and aluminum disputes with the United States,” rather than looking to the EU to do it for us.

Airbus said last month it would end a system of financial support from France and Spain that the World Trade Organization had deemed illegal and unfair to Boeing, Airbus’ main rival. However, Lighthizer said on Wednesday that the EU and member states had “failed to take the necessary steps to comply with WTO rulings.”

Truss confirmed on Twitter Thursday morning that she was still pushing for the current malt whiskey tariffs to be lifted. “I welcome the decision of the United States not to impose tariffs on gin and blended whiskey and to remove tariffs on shortbread,” she said.

“But there are still tariffs on British products like Scotch single malt. These rates are not in the interest of anyone. I am in talks with [Lighthizer] to remove them as soon as possible. ”

SWA officials believe the US is retaining malt whiskey, along with other high-value products such as cashmere woolens, as a bargaining chip in its battle with the EU and the UK in the Airbus-Boeing dispute, after the WTO upheld US complaints that the EU is unfairly subsidizing Airbus.

SWA believes UK ministers were too reliant on the EU to negotiate a deal in this dispute and only began to focus on damage to UK exports after they started to pressure ministers, including Boris Johnson , during the Prime Minister’s trip to Scotland last month. .

Controversy plays a big part in domestic politics as well, fueling attacks in Scotland on the British government’s desire to strike deals with Donald Trump while failing to protect such a valuable and iconic product, nine months before the Scottish parliamentary elections next May .

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British ministers are keenly aware that support for the Scottish National Party has skyrocketed, with the party polling 57% in the latest opinion poll, while support for independence climbs to 54% without knowing. The SWA added to this pressure by criticizing the £ 500,000 extra UK government spending on export promotion as insufficient, and called on the Chancellor to reduce whiskey duties in his fall statement.

Ivan McKee, the Scottish Government’s Trade Minister, said the crisis was an important test of Johnson’s trade policy after Brexit.

“For too long the UK government has waited for the EU to fix this problem for them rather than tackle the problem themselves. This prevarication has cost months of sales to major Scottish exporters – including our shortbread companies, ”he said.

“Having left the EU, the UK government has the trading powers it wanted. Now he has to use them. This is the first real test of the independent trade policy that she so wanted. “

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