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News Alert: U.S. To Suspend Tariffs On U.K. Spirits For Four Months

March 4, 2021

The U.S. has agreed to suspend tariffs on U.K. wines and spirits related to the aerospace dispute that has sprawled into a larger trade war over the past few years. The move will come as welcome but overdue for Scotch whisky players in the U.S., where the single malt category has been hampered by the 25% tariff.

“Today is a very good day for Scotch and Scotland,” said Diageo CEO Ivan Menezes. “We recognize the Government’s tireless efforts, using the U.K.’s newly independent trade policy, to deliver the suspension and hopefully in time, a permanent end to these punitive tariffs.”

Scotch whisky exports to the U.S. fell 35% to £949 million ($1.3b) from October 2019—when the U.S. imposed 25% tariffs on single malts—through November 2020, according to the Scotch Whisky Association (SWA).

The World Trade Organization said the suspension would “ease the burden on industry and take a bold, joint step” toward resolving the larger trade issues between the two countries. “This will allow time to focus on negotiating a balanced settlement to the disputes,” the WTO stated.

Still, U.K. tariffs on American whiskey remain in place, DISCUS pointed out, noting, “While we welcome the U.S. decision to suspend the retaliatory tariffs on UK distilled spirits for four months, we are greatly disappointed that the UK’s debilitating tariff on American Whiskey remains in place. American Whiskey exports to the UK, our fourth largest market, have declined by 53 percent, from $150 to $71 million since the imposition of tariffs (2018-2020).”—Daniel Marsteller

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