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The US tariff on single malt Scotch led to a 20 per cent fall in Scotland’s whisky exports last year – the equivalent of two million litres of pure alcohol – the latest Scottish Government figures have revealed.
The United States is the largest overseas export destination for Scotch whisky. Single malt Scotch whisky exports to the US were valued at £344 million in 2018, accounting for 26 per cent of total overseas single malt exports, and 21 per cent of total drink exports to the US.
In October 2019, the US Government imposed a 25 per cent tariff on single malt Scotch whisky imports from the UK. The tariffs have been temporarily suspended since March 2021, and in June 2021, the UK and US administrations agreed on a five-year suspension.
The Scottish Government has published a paper estimating the impact of US tariffs on UK exports of single malt Scotch whisky between Q4 2019 – Q4 2020.
The analysis aims to provide a best-effort estimate of tariff impacts on exports while accounting for the effects of Covid-19, using novel research methods. The findings suggest that the quantity of single malt exports declined by between 9.5 per cent (1.0 million litres of pure alcohol, or LPA) and 19.6 per cent (2.0 million LPA) between Q4 2019 and Q4 2020 as a result of the tariff.
Rural Affairs Secretary Mairi Gougeon said: ‘The punitive tariffs imposed by the US on whisky exports from Scotland as a result of the long running Boeing / Airbus trade dispute between the US and the EU saw up to five million fewer litres of single malt sent to America between the fourth quarter of 2019 and the fourth quarter of 2020.
‘The 25 per cent tariff imposed on imports of single malt Scotch whisky due to the long-running trade dispute – which had nothing to do with Scottish producers – meant that Scotland was once again disproportionally hit by the UK Government’s posturing on international trade.
‘While we are pleased that the dispute and the sanctions has now been suspended, the impact on Scottish producers was significant and highlights why we should have a meaningful role in trade discussions to ensure that the interests of the Scottish economy are protected.’