Distillers in UK and US unite in whisky tariff protest amidst tit-for-tat trade disputes

Thu 23 Jul 2020
Posted by: William Barns-Graham
Trade News

whisky distillery

Spirits producers on both sides of the Atlantic are coming together to urge their governments to drop rising import taxes imposed on their industries.

Since the autumn last year, the US and EU have been imposing tit-for-tat tariffs following a longstanding dispute over EU subsidies for Airbus.

The US has also spoken out against the new taxes being implemented by European governments, including the UK, on corporate tech giants operating in Europe.

US senators have argued that the taxes unnecessarily harm the country’s large tech companies, including Amazon, Facebook and Google.

Trade wars

In October 2019, President Trump imposed a range of retaliatory tariffs on a broad range of popular EU exports, including a 25% duty on single malt Scotch, Single Malt Irish whiskey and liqueurs and cordials from the UK.

The EU’s response to these tariffs also included a 25% duty on US whiskeys. The exchange has harmed industry exports on both sides, with US imports of Scotch and Irish whiskey and EU imports of US whiskey both falling by about a third, report Forbes.

Toast not tariffs

With a US public consultation into further tariffs due to conclude on Sunday (26 July) – including the suggestion of a 100% tax on whiskeys – trade bodies representing the industries on both sides of the Atlantic are campaigning for de-escalation.

“We are urging everyone connected to the US and EU spirits industries, from bartenders to farmers to adult consumers, to tell the US Trade Representative that these tariffs are costing hospitality industry jobs and must be eliminated,” Chris Swonger, president and CEO of the Distilled Spirits Council of the United States (DISCUS), told Forbes.

DISCUS have facilitated over 2,000 comments to the consultation as part of their #ToastNotTariffs social media campaign.

Cross-Atlantic tensions

Tensions between Europe and the White House have spilled over into UK negotiations for a trade deal with the US.

Liz Truss is expected to tell a committee in the House of Lords today that the tariffs being proposed in the US are “outrageous”, according to Politico.

The UK and US are also apart on these trade issues:

  • Digital tax - top members of a US senate committee overseeing trade have warned the UK that its implementation of a new tax on digital companies is an unnecessary “punitive action against an ally” (source: Financial Times) and could harm the changes of a UK-US deal.
  • Travel restrictions - members of the British-American Business (BAB) group met with US Secretary of State Mike Pompeo and the UK’s Foreign Secretary Dominic Raab yesterday (Wednesday 22 July) to express concern about current travel arrangements between the countries (source: City AM).
  • Agriculture – the UK is resisting US demands for greater market access for its agricultural products. Trade bodies in the UK – including the National Farmers Union – have expressed concern that the UK could be flooded with cheaper US imports should tariffs or food and sanitary standards be lowered as a result of a deal (source: Financial Times).

The two sides have come together on security, however, following the UK’s decision to U-turn on the deal it had agreed with Huawei for the Chinese firm to deliver its 5G infrastructure.