The MP for Glasgow North West, Carol Monaghan, has urged the UK Government to work with United States counterparts in abolishing Single Malt whisky tariffs. In October 2019, the Trump administration approved tariffs of 25% on Single Malt imports into the US. This move was controversial, as the Single Malt industry had enjoyed a zero-tariff import agreement with the US for the previous 25 years.
These 25% tariffs are the result of a long-standing aviation industry dispute between the US and the EU, primarily concerning subsidies for Boeing and Airbus (based in the US and Europe respectively). In October 2019, the World Trade Organization (WTO) ruled that the US could impose tariffs of £6.1 billion on goods imported from the EU.
At the time, Scotland’s whisky industry was targeted as part of these far-reaching tariffs. Other goods of considerable importance to Scotland’s economy – such as cashmere clothing – have also been affected.
The devastating effects of Single Malt trading in 2020 are now becoming clear: according to data published by The Scotch Whisky Association (SWA), the 2020 export value of Scotch fell by £1.1 billion from the 2019 value. The SWA ascribes these Single Malt export figures – the lowest in a decade – to the combined effects of US tariffs and the trading impact of the COVID-19 pandemic.
However, the direct impact of US tariffs is unmistakable. Scotland’s Single Malt exports to the US fell by 32% to £729 million – a stark indicator of the detrimental effects of 25% tariffs. Furthermore, although the US accounts for one fifth of global Single Malt exports, it accounts for a disproportionate one third of global losses.
To counter this economic damage imposed on the whisky industry, Carol Monaghan has called for an end to 25% US tariffs. Commenting on the current situation, Monaghan said:
“The Single Malt industry is being punished by a diplomatic dispute for which it bears no responsibility. The Trump administration’s decision to impose 25% tariffs on Single Malt has been severely damaging for the industry, which accounts for three quarters of Scotland’s food and drink exports.
“In 2020, Scotland’s Single Malt exports amounted to £3.8 billion – compared with £4.9 billion in 2019. Although changes in trading and consumer behaviour during the COVID-19 pandemic are a cause, this sharp decline in export value is in no small part due to extortionate US trade tariffs.
“The whisky industry is at the heart of Scotland’s economy. In many cases, distilleries and processing plants are small, local enterprises, and the economic lifeblood of both rural and more urban communities. I have seen this myself in the Glasgow North West constituency, where Edrington in Drumchapel employs several hundred employees and bottles some of the world’s finest Single Malts.
“The SWA has branded this sharp decline in export value a ‘lost decade of growth’, as the economic progress of the last ten years has essentially been reversed. This is a sad reality for an industry that currently employs more than 10 000 people in Scotland.
“For many years, the US has been a key market for Single Malt producers. With some diplomatic efforts from the UK Government, there is no reason why 2020’s ill fortunes cannot be rectified. With the Biden administration now occupying the White House, this is a prime opportunity for the UK Government to revise current tariffs with counterparts in Washington.
“In the House of Commons, I asked Kwasi Kwarteng MP (Secretary of State for Business, Energy and Industrial Strategy) what the UK Government is doing to work with US officials to this end. He agreed with me on the importance of resolving these tariffs for the benefit of whisky producers. As such, I will continue to ask these pressing questions in Parliament in order to hold the UK Government accountable to this commitment.”