Plans for 25% trade tariffs on Scotch whisky exported to the US are “profoundly worrying” for the industry and “in no-one’s interest”, Scottish First Minister Nicola Sturgeon has said.
The World Trade Organisation (WTO) has given the US the green light to impose tariffs on up to 7.5 billion dollars (£6.1 billion) of goods from the EU as retaliation for illegal subsidies the bloc gave to plane-maker Airbus.
It clears the way for the Donald Trump administration to impose counter-measures on the 28-member bloc and follows a WTO ruling in May 2018 on the Airbus subsidies.
READ MORE: Donald Trump could bring in 25% tariff on Scotch
During First Minister’s Questions at Holyrood on Thursday, Ms Sturgeon said: “The news this morning is profoundly worrying for Scotch whisky and for the other Scottish products.
“I discussed the issue directly with the [Scotch Whisky Association] just a couple of weeks ago and we will continue to encourage the UK Government to support a negotiated settlement to this.
“We support the efforts of the EU to find that negotiated settlement.
“It is in no-one’s interest to have trade wars like this – everyone ends up being a loser.
“I would encourage UK ministers to work hard to do so.”
Whisky is one of Scotland's main exports
The Scotch Whisky Association (SWA) has called on both parties in the argument to de-escalate their trade dispute.
Chief executive Karen Betts said: “The tariff will undoubtedly damage the Scotch whisky sector.
“We expect to see a negative impact on investment and job creation in Scotland, and longer-term impacts on productivity and growth across the industry and our supply chain.
“We believe the tariff will also have a cumulative impact on consumer choice.”
READ MORE: Donald Trump: US will put tariffs on £8.4bn of EU goods
The Trump administration has announced plans to impose tariffs on EU cheeses, olives and whisky, as well as aircraft and aircraft parts.
You can read the full SWA response from @KarenEBetts on the US tariffs on #ScotchWhisky here 👉 https://t.co/NyYQSlMfSp
— Scotch Whisky Association (@ScotchWhiskySWA) October 3, 2019
However, Wednesday’s WTO decision may require fine-tuning of that list before it is formally signed off on October 18.
The Scotch whisky industry directly employs about 11,000 people in Scotland, and many more indirectly through its supply chain.
More than 7,000 of the jobs are in rural areas across the country.
America is the industry’s single biggest market – with more than £1 billion of the spirit exported last year.
HMRC data and SWA analysis shows the US market accounted for 22% of global value and 10.7% of global volumes of Scotch exports in 2018.
The value of exports to the US grew to £1 billion last year from £280 million in 1994.
Gary Smith, GMB Scotland secretary, said: “This is a troubling glimpse into the post-Brexit future and everyone with the Scottish economy’s best interests at heart should be concerned about our prospects following this development.
“The collective strength we have in the EU trading bloc will be gone and there is simply no such thing as a ‘special relationship’ with the United States – Trump will squeeze the UK economy for everything he can get.”
Calls have been made for the UK Government to work with the EU and US to de-escalate the dispute (Stefan Rousseau/PA)
Meanwhile, the Scottish Greens said the Scottish Government should respond by suspending US military use of publicly-owned Prestwick Airport.
READ MORE: Donald Trump - Brexit deal may stop trade with the US
A Department for International Trade spokesman said: “The UK, through the EU, is seeking confirmation from the WTO that we have complied fully with WTO rulings regarding support to Airbus, and should not be subject to tariffs.”
A Scottish Government spokesman said: “We have made our concerns about the impact on whisky and other Scottish produce clear to UK ministers and expect them to do all they can to protect Scottish exports.”
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