The US government announced a 25% tariff on all single malt Scotch whisky imports, as part of a wider set of tariffs aiming to punish the European Union.
Taking effect October 18th, the U.S. Trade Representative’s office released a list of hundreds of goods that will get hit hard beyond whisky. It includes Parmesan cheese from Italy, olives from France and Spain, wool clothing from the U.K, and European aircraft. The overall list covers approximately $7.5bn of goods.
So why is this happening? It all has to do with planes, rather than the tariffs that the E.U. had placed on Bourbon in 2018 (which in turn were initially placed because of U.S. tariffs on E.U. tariffs). This latest round is the result of a dispute that originally began in 2004, when the U.S. complained to the World Trade Organization about the subsidies the E.U. was providing to Airbus for the development of its A380 and A350 planes, to the detriment of Boeing. The case has been rolling ever since and has now escalated following a WTO ruling issued Wednesday as global trade wars between the Trump administration and the rest of the world heat up.
It certainly is a major piece of bad news for the Scotch whisky industry, as the U.S. is its largest market. Overall Scotch whisky exports to the US last year were worth $1.3bn, accounting for over a fifth of total global exports by value. The U.S. single malt market itself is worth $463 million dollars, over a third of the entire global market for Scotch single malt.