WHISKY firms are raising a glass this week after the US agreed to suspend its tariffs on imports for five years.
It comes after the UK agreed a trade deal with Australia on Tuesday which will see the five per cent tax on imports of the spirit lifted. The agreement also comes after the EU and US agreed to suspend their own retaliatory tariffs against one another for five years, on goods flowing between the two countries.
Joe Biden’s government has today agreed to remove the 25% import taxes on the spirit being imported into the US, after they were imposed by Donald Trump as part of retaliation in an ongoing dispute over aircraft manufacturer subsidies with Europe.
Liz Truss, UK Government trade secretary met with her US counterpart Katherine Tai at the Department for International Trade’s headquarters in London yesterday to reach the agreement to suspend tariffs for five years. The UK will also suspend retaliatory tariffs on US imports.
READ MORE: Whisky chief declares Scotch is bouncing back in biggest market
Earlier this year President Biden agreed to suspend the tariffs on whisky imports for four months, which was due to run out next month but whisky firms are now breathing a sigh of relief as a result of this new arrangement.
Ms Truss said the deal would not only support whisky firms but others which have had tariffs suspended such as Ayrshire cashmere.
She said: “This deal will support jobs across the country and is fantastic news for major employers like Scotch whisky and sectors like aerospace. We took the decision to de-escalate the dispute at the start of the year when we became a sovereign trading nation, which was crucial to breaking the deadlock and bringing the US to the table.
“I want to thank Katherine personally for her role in making this happen. Today’s deal draws a line under an incredibly damaging issue and means we can focus on taking our trading relationship with the US to the next level, including working more closely to challenge unfair practices by nations like China and using the power of free trade to build back better from the pandemic.”
Alister Jack, Secretary of State for Scotland said the agreement would help an industry that was the "cornerstone of Scotland's economy".
He said: "The suspension of retaliatory tariffs for five years is great news for the Scottish whisky industry – a cornerstone of Scotland’s economy.
“The UK Government has fought incredibly hard on this issue, petitioning the highest levels of the US administration to remove tariffs which were harming our Scottish exporters. We are very pleased to have brought an end to the trade dispute.
"I look forward to our close trading relationship with the US going from strength to strength, opening up new opportunities for Scottish businesses."
Chief Executive of the Scotch Whisky Association Karen Betts welcomed the news, and said it would greatly help distillers to “focus on recovering exports to our largest and most valuable export market.”
She added: “Today’s agreement is a culmination of many months of intensive negotiations and we’re grateful to Liz Truss and Katherine Tai and their teams for their hard work.
“Given, however, that this deal suspends tariffs rather than fully resolving the underlying dispute, what’s critical now is that the governments and aerospace companies on both sides stick to their commitments and work with one another constructively.”
She said that American whisky was still subject to tariffs on import to the UK and EU “as a result of a separate dispute on steel and aluminium, and we hope these tariffs can also be resolved quickly.”
READ MORE: Australia trade deal: Fears farmers are being 'short-changed' but good news for whisky
David Linden, the SNP MP, also welcomed the arrangement but said the UK Government had more to do to support the whisky industry, which has suffered during the pandemic and as a result of the dispute.
He said: “From the outset, Scotch whisky should never have been caught in the cross-fire of this trade dispute and today’s news will see the industry in Scotland breathe a massive sigh of relief.
“Whilst this announcement is very welcome after months of cross-party campaigning, the losses to Scotch Whisky exports have been eye-watering and it will take time for the industry to get back on its feet. That’s why further support is absolutely vital.
“Scotch whisky plays a crucial role in the success of Scotland’s food and drinks sector and our economy but the industry has been dealt a triple whammy with the economic impacts of the tariffs, Brexit and the pandemic.
"Going forward, we need to see continued and intensified support for Scotch whisky and that includes a response to the long-awaited Treasury review of alcohol duty.
“Today is a big step forward but the UK government has far more to do to support this iconic Scottish brand.”
READ MORE: Scottish communities 'will be destroyed' by crippling Trump whisky tariffs
GMB Scotland, which has been lobbying for an end to the tariffs along with trade unions across the Atlantic, said there must now be a "new era" for collaboration, to ensure workers are now put at risk and their future can be protected.
Keir Greenaway, a GMB Scotland organiser said: "This arrangement is welcome, but it’s not before time.
“After a long and damaging tariff war on single malt exports, it should offer greater stability for Scotland’s whisky and spirits sector in the US market, which in turn should be better for the job security of the industry’s workers.
“But this can’t mean political leaders taking their foot off the gas. Whisky and spirits manufacturing is the jewel in the crown of our world-class food and drink sector, supporting tens of thousands of jobs across the country – it will be a pillar of our economic recovery.
“We need a new era of political and industrial collaboration to pave the way for the continued prosperity of the whisky and spirits sector, and to defend its interests in future trade reform.
“Learn the lessons of the last eighteen months. The Prime Minister turning up for a dram and a photo-op before heading back to London isn’t good enough. The voices of the industry’s workers must be heard, and their concerns understood.”
Drinks organisations in the US have also welcomed the agreement, but say American whiskeys are still suffering as the spirit is subject to tariffs due to a secondary dispute about steel and aluminium. They have urged Ms Truss and Boris Johnson to suspend these 25% tariffs immediately.
They hope this will be next on the negotiating table for US trade officials
Chris Swonger, president and CEO of the Distilled Spirits Council of the United States explained: "We greatly appreciate the Biden administration’s leadership in resetting the important transatlantic trading relationship with the UK, which is critical to the deeply integrated U.S. and UK spirits industries."
He added that while US vodka, brandy and rum would now be able to be imported to the UK tariff-free, American whiskey will not.
He said: "Unfortunately, American Whiskeys remain the only spirit subject to tariffs in the transatlantic trade disputes due to the continued application of a 25 percent tariff in connection with a dispute on steel and aluminum.
"This puts American Whiskeys at a serious competitive disadvantage in the UK and the EU, our two most important export markets.
"Since the tariffs were imposed, American Whiskey exports to the UK have declined by 53%.
"We are pleased that the UK government has launched a consultation to review these tariffs and would encourage the UK to promptly remove its tariff on American Whiskeys."
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