US agrees to suspend retaliatory tariffs on Scotch whisky, Liz Truss announces

Former US president imposed 25% tariffs in 2019 after long-running dispute

(Getty Images)

Retaliatory tariffs imposed by the United States on UK goods including Scotch whisky have been temporarily suspended, the international trade secretary Liz Truss has announced.

In a de-escalation of a long-running dispute over aerospace tariffs, the suspension, which is due to come into force on Monday, will reduce the 25 per cent tariff rate to zero per cent for four months.

Last month the Scotch Whisky Association described the situation as “unsustainable”, pointing to figures showing exports of single malt Scotch whisky to the US had fallen by a third — amounting to £500 million.

Welcoming the move, which also covers items such as pork, cashmere and cheese, the director general of the British Chamber of Commerce Adam Marshall said it was now “crucial” both London and Washington “find permanent solutions that give stability and certainty to firms”.

It comes after the former US president Donald Trump imposed the tariffs in 2019 in retaliation at European Union state support for the aerospace group Airbus. In response, the bloc imposed penalties of up to $4 billion on US goods and services.

At the end of 2020, the UK government announced it would unilaterally drop tariffs on US goods relating to the dispute at the end of the Brexit transition period in a move that was interpreted as some as an attempt to curry favour with the incoming president Joe Biden.

Announcing the new agreement on Thursday, Ms Truss said the new US administration had “embraced our move to make a fair settlement”, with the temporary suspension of the 25 per cent tariff.

“The benefits will be felt across our nation, especially in Scotland, where Scotch whisky distillers will be able to sell at lower prices in the United States, their most valuable market,” she claimed.

“The easier it is for Americans to buy a bottle of Macallan, Talisker or Glenfiddich, the more money those producers will have to invest in their businesses, their staff and futures.”

A joint US-UK statement added: “The United Kingdom and the United States are undertaking a four-month tariff suspension to ease the burden on industry and take a bold, joint step towards resolving the longest running disputes at the World Trade Organisation.

“The United Kingdom ceased applying retaliatory tariffs in the Boeing dispute from January 1, 2021 to de-escalate the issue and create space for a negotiated settlement to the Airbus and Boeing disputes.

“The United States will now suspend retaliatory tariffs in the Airbus dispute from March 4, 2021, for four months. This will allow time to focus on negotiating a balanced settlement to the disputes, and begin seriously addressing the challenges posed by new entrants to the civil aviation market from non-market economies, such as China.

“This will benefit a wide range of industries on both sides of the Atlantic, and allow for focused settlement negotiations to ensure that our aerospace industries can finally see a resolution and focus on Covid recovery and other shared goals.”