Britain has offered to drop tariffs on US goods in a bid to end a transatlantic trade dispute that has left the Scotch whisky industry reeling.
President Donald Trump imposed 25% tariffs on single malts in October last year as part of a retaliation package against the EU’s illegal subsidies to plane-maker Airbus.
In August the tariff, which has so far cost the sector well over £360 million, was renewed for another 180 days.
The EU responded with its own tariffs on £3 billion of US goods, but trade secretary Liz Truss has now announced plans to suspend those measures from January 1 – presenting it as an olive branch to the US.
Ms Truss said: “As an independent trading nation once again, we finally have the ability to shape these tariffs to our interests and our economy, and to stand up for UK business.”
“Ultimately, we want to de-escalate the conflict and come to a negotiated settlement so we can deepen our trading relationship with the US and draw a line under all this.”
The beginning of the end?
Scotch Whisky Association boss Karen Betts welcomed the move, saying: “This is a very encouraging step, it shows the UK Government’s determination to de-escalate the damaging transatlantic trade disputes that have seen Scotch whisky exports to the US fall by over 30% in the past year.
“We hope that this marks the beginning of the end of trade tensions with the US.”
Whisky is a cornerstone of Scotland’s economy, employing around 11,000 people, many in rural areas.
Scottish Tory leader Douglas Ross, whose Moray constituency has more distillers than anywhere else in the UK, said: “These tariffs have disproportionally impacted Scottish and Moray products so I’m pleased to see that we are progressing with our efforts to have them removed.
“Our ability post-Brexit to set our own policy and take action to protect some of our key industries underlines the benefit of the UK regaining its status as an independent trading nation.”
We understand that high-level talks between UK and US officials are to continue in the coming weeks.
But if the talks do not yield any relief, there is an expectation that the Department for Business and Treasury will step in to offer the industry some support.
“It’s very much on everybody’s radar,” a source told us.
Scottish Secretary Alister Jack said the UK Government is “determined” to stop the damage caused by the tariffs.
He said: “This move to de-escalate long-standing trade conflicts is a clear show of UK Government determination to end the punitive tariffs, notably on Scotch whisky and cashmere.
“We will continue to defend these industries, petitioning the highest levels of the US administration to remove tariffs.”