Scotland’s whisky sector has warmly welcomed the removal of tariffs on exports of Scotch to the United States, a trade breakthrough apparently secured from US president Donald Trump by HRH King Charles during this week’s state visit.
Since Trump’s across-the-board introduction of tariffs on imports into the US, the Scottish whisky industry had been losing around £4million a week in lost exports to that market, adding up to around £150m over the course of the last year.
The trade war has also been hurting US spirits producers, as the countries targeted by Trump developed a reciprocal distaste for American whiskeys, with the cooling of European Union and Canadian markets in particular contributing to a 19% slump in US Whiskey exports.
At a production level, the new barriers to trade had also thrown a spanner in the works of the long and mutually beneficial relationship between Scotch whisky distilleries and Kentucky bourbon makers, whose used American oak barrels had become a staple of Scotland’s maturation warehouses.
This week, reversing his earlier decision, Trump said: “In honor of the King and Queen of the United Kingdom, who have just left the White House, soon headed back to their wonderful country, I will be removing the tariffs and restrictions on whiskey having to do with Scotland’s ability to work with the Commonwealth of Kentucky on whiskey and bourbon, two very important industries within Scotland and Kentucky.
“People have wanted to do this for a long time, in that there had been great inter-country trade, especially having to do with the wooden barrels used,” he added. “The King and Queen got me to do something that nobody else was able to do, without hardly even asking!”
In reality, however, there’s been a huge amount of negotiation going on over many months between the UK and US in an effort to return their respective spirits industries to something like the profitable status quo that existed before Trump’s second presidency.
Interviewed by the BBC, Graeme Littlejohn, director of strategy for the Scotch Whisky Association, conceded: “Perhaps the state visit has been the catalyst for getting this over the line and the King has added that little bit of royal sparkle to make the deal work.”
In the SWA’s official statement, its chief executive Mark Kent said: “This deal is a significant boost for the Scotch Whisky industry in our most valuable export market. Distillers can breathe a little easier during a period of significant pressure on the sector.
“We are hugely grateful for the sustained efforts on both sides of the Atlantic. For months, many have worked tirelessly to return zero-for-zero tariff trade for whisky and bourbon.
“The special relationship that the Scotch Whisky and American Whiskey industries share will be reinvigorated by this announcement,” said Kent.
“While challenges in our sector remain, we can now redouble our efforts to boost the benefits our two great industries bring to communities across Scotland and the US.”
Ian Macleod Distillers sales and brand director, Ian Shackleton, commented: “This is great news for our company and for our industry. We can now put behind us the saga and disruption caused by the uncertainty of the past year.
“As a small, family-owned producer with some world famous, multi-award-winning brands, the USA is a vital and growing marketplace for us. We have some excellent partners in North America and the freer we are to work with them, the better it is for all concerned.”
Regarding the timing of President Trump’s decision, Mr Shackleton added: “We are grateful to His Majesty The King for his support.
“We had the pleasure of serving him with our superb Rosebank Whisky earlier this year. Their efforts will have widespread and positive repercussions. We thank President Trump for his decision.”
The Distilled Spirits Council of the United States, which has also been pushing for a return to zero percent tariffs on imports and exports of spirits, welcomed Trump’s announcement.
“The removal of the 10% tariff on UK whisky would be a major victory for American hospitality businesses that are deeply impacted by international trade,” said council president and CEO Chris Swonger.
Swonger noted, however, that a deal with the UK would not on its own restore American spirit exports to their pre-tariff levels so long as trade relations with Canada and the European Union remained impaired.
