Trump's tariff reversal reopens a major market for Scotch whisky

LONDON -- After a year of wrangling, the Scottish whisky industry has finally gotten what it wants -- the elimination of tariffs on its sales to the United States.

Makers of Scotch whisky have been losing millions of pounds a week since a 10% tariff was imposed on exports to the United States, according to the Scotch Whisky Association. Distilleries and industry leaders on both sides of the Atlantic, as well as Scottish politicians, had been lobbying relentlessly to have these tariffs scrapped. Despite the diplomatic efforts, it was ultimately a visit from King Charles III this week that persuaded President Donald Trump to ditch the levy.

Late on Thursday, Jamieson Greer, the U.S. trade representative, released a statement confirming that whiskey from Britain, which includes Scotch whisky and some Irish whiskey from Northern Ireland, would get “preferential duty access” to the United States. It is unclear when the tariff reduction will take effect.

“This deal is a significant boost for the Scotch whisky industry in our most valuable export market,” Mark Kent, the CEO of the Scotch Whisky Association, said in a statement. “Distillers can breathe a little easier during a period of significant pressure on the sector.”

Last year, after the tariffs were imposed, Scotch whisky exports to the United States dropped 15%, according to the association. The tariffs also disproportionately hurt smaller distilleries, which tend to use the United States as their first export market before branching out to other countries, the group said.

The British industry did increase exports to some other countries last year, including India, China, Germany and Turkey, helping to offset some of the loss. But like other alcohol industries, Scotch is under pressure as people drink less, in part because of economic anxiety and widespread health warnings.

Though the tariff exemption is a coup for the whiskey industry, its impact on the broader trade relationship between Britain and the United States is limited. Britain was the first country to come to an agreement with the Trump administration last May. It included lower tariffs on British cars and plane parts in exchange for more exports of American beef and ethanol. But other issues were left outstanding, and those talks have moved relatively slowly.

Late last year, the two countries reached an agreement on pharmaceutical products; Britain would pay more for new medicines, and the United States wouldn’t impose new tariffs. Disagreements remain over steel tariffs and digital services taxes and regulations.

At the same time, hanging over all trade talks are new investigations by the Trump administration targeting dozens of countries over their trade policies on goods made with forced labor, which could be used to impose further tariffs. Trump has applied a global tariff rate of 10%, though products like energy, fertilizers and aircraft are exempt.

Britain’s exports of goods to the United States dropped by 1.5 billion pounds (about $2 billion) in April last year, compared with a month earlier, when exports were high because companies aimed to get ahead of tariffs, according to data from Britain’s statistics agency. Exports have stayed low since, it said.

This article originally appeared in The New York Times.

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