United Kingdom

America drops tariffs on whisky, cashmere and Stilton after splitting UK from charges imposed on EU

Britain and the United States moved a step closer to a trade deal last night after Washington agreed to suspend punitive tariffs on Scotch whisky and other UK exports.

In a major breakthrough, the US said millions of pounds worth of tariffs on Scotch and other goods would be suspended from Monday, easing the pressure on exporters.

The decision is a vindication for trade secretary Liz Truss, who unilaterally lifted similar tariffs on a range of US goods in January. At the time, Labour accused her of ‘capitulating’ to Donald Trump in the hope of agreeing a last-minute trade deal.

But yesterday the Biden administration responded in kind by lifting crippling tariffs on British goods, including Scotch, cashmere and Stilton cheese.

Boris Johnson tastes whisky during a general election visit to Diageo's Roseisle Distiller

Cashmere, a top UK export, is also set to benefit from the US relaxation on tariffs

The unique Stilton cheese has also received a boost from the Biden Administration news

They were part of a £5.6 billion package imposed by the Trump administration on EU countries as part of a long-running dispute over subsidies given to Airbus.

The EU responded with retaliatory tariffs of £3 billion on US goods.

Yesterday, Washington agreed to separate Britain from the EU package and suspend tariffs on the affected UK goods for four months while further talks take place.

The move means an end for now to the 25 per cent tariff on Scotch, which has hammered exports to the US. It could also smooth the path to a wider post-Brexit trade deal with the US in the coming months. The US is Britain’s biggest export market.

Bottles of single malt scotch whisky Glenmorangie will benefit from the new US agreement 

It comes a month after it was warned that the industry was suffering from previous rules

Scotch was the UK’s largest food and drink export last year, and exports of single-malt Irish and Scotch whiskies to the US were worth about £340 million in 2018.

Exports to the US have fallen by 35 per cent over the 16 months the measures have been in force, costing companies more than £500 million, according to the Scotch Whisky Association (SWA).

Chief executive Karen Betts described the breakthrough as ‘fabulous news’ and said distillers would be ‘raising a dram’ to Miss Truss.

Marco Forgione, director general of the Institute of Export & International Trade, also welcomed the news.

He said: “Scotch whisky, cashmere, cheese and machinery are important products – for Brand Britain, for employment and for the economy. 

"The suspension of US tariffs, coming hard on the heels of Wednesday's budget, is great news for UK exporters.

“It underlines the special economic relationship between the UK and the US as we both forge our new approaches to international trade.”

It came a month after it was revealed exports of single malt Scotch whisky had fallen by more than a third - amounting to more than £500 million - since the 25% tariff was imposed in October 2019. 

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