UK & USA: Scotch whisky distillers express fears over threat of “damaging” import tariffs in the US

Scotch whisky distillers have expressed their fears over the threat of “damaging” import tariffs being re-imposed on single malt across the Atlantic, The Herald reported on January 2.

President-elect Donald Trump has signalled the US will pursue protectionist trade policies when he returns to the White House this month, which is widely expected to mean the reintroduction of import tariffs in the whisky industry’s most lucrative export market.

Import tariffs introduced during the first Trump administration, which stemmed from a trade dispute between the US and European Union over aircraft subsidies, are estimated to have hit exports of single malt Scotch whisky to America by several hundred million pounds.

The UK Government appointed Lord Peter Mandelson a former minister for business and trade in the cabinets of Tony Blair and Gordon Brown, as ambassador to the US shortly before Christmas, ahead of what are expected to be contentious trade negotiations with the incoming President. The appointment of the highly experienced politician appears to illustrate the importance the UK is attaching to securing favourable trading terms with the US in the Trump era.

Speaking shortly before Christmas, Scottish Chambers of Commerce chief executive Liz Cameron highlighted the importance of the US economy to Scotland’s exporters and the damage tariffs would cause.

And William Wemyss, chairman of Wemyss Family Spirits, owner of the Kingsbarns Distillery in Fife, has now echoed those views. He told The Herald: “Any tariff will of course be damaging, and it really depends what level these are introduced at and how serious it becomes. Last time they were imposed at 25% and it cost the industry £600 million of exports to the States.”

Billy Walker, majority owner of The GlenAllachie Distillers Company, said: “We are hoping we have enough mileage in terms of the relationship – and I am talking about politicians now – that this will not come to be. Indeed, you would like to see the suspended tariff – and remember, the tariff in single malt is only suspended, I think until 2026 – removed and that there is a comfortable direction of travel for whisky in general. Tariffs would be very, very unwelcome.”

Meanwhile, when asked how Wemyss may be affected by the increases in spirits duty and employer national insurance contributions announced in the autumn Budget, Mr Wemyss said: “Both obviously affect us and all Scotch whisky businesses. The rise in employers’ NI [contributions] will definitely make us more reticent about employing additional people purely from an affordability perspective. We need to find some way to help mitigate these cost increases.”

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