UK reaches historic deal on the US tariff dispute

The UK, which was involved as a member of the EU, took the decision to deescalate the dispute by unilaterally suspending retaliatory tariffs on the US at the start of this year, which encouraged the US to agree to a four-month suspension of tariffs while both sides negotiated a longer-term arrangement

The 17-year dispute, the longest-running in the history of the World Trade Organization (WTO), has seen damaging retaliatory tariffs levied on products on both sides of the Atlantic due to disagreements over support for large civil aircraft.

The disagreement has hit industries such as cashmere, machinery, and single-malt Scotch whisky that employ tens of thousands of people across the UK. The Scotch Whisky Association estimates the tariffs have cost the sector hundreds of millions of pounds in lost revenue.

The UK, which was involved as a member of the EU, took the decision to deescalate the dispute by unilaterally suspending retaliatory tariffs on the US at the start of this year, which encouraged the US to agree to a four-month suspension of tariffs while both sides negotiated a longer-term arrangement. The UK and US will now work together to put the agreement into practice and strengthen cooperation in the large civil aircraft sector. SWA statement following the UK Government announcement that tariffs on Scotch Whisky have been suspended for a further five years as part of a UK-US deal on future aerospace subsidies.

Commenting on the UK-US deal on future aerospace subsidies which further suspends tariffs on Scotch Whisky for five years, Chief Executive of the Scotch Whisky Association Karen Betts said: "This is very good news for Scotch Whisky. The past two years have been extremely damaging for our industry, with the loss of over £600m in exports to the United States caused by a 25 per cent tariff on Single Malt Scotch Whisky imposed as a result of the long-running dispute between US and European aircraft manufacturers. This deal removes the threat of tariffs being reimposed on Scotch Whisky next month and enables distillers to focus on recovering exports to our largest and most valuable export market.

"Today's agreement is a culmination of many months of intensive negotiations and we're grateful to Liz Truss, International Trade Secretary, and Katherine Tai, US Trade Representative, and their teams for their hard work. Given, however, that this deal suspends tariffs rather than fully resolving the underlying dispute, what's critical now is that the governments and aerospace companies on both sides stick to their commitments and work with one another constructively", he said.

"I want to note too that American whiskies remain subject to tariffs on entry into the UK and EU as a result of a separate dispute on steel and aluminium, and we hope these tariffs can also be resolved quickly," he added.

The Scotch Whisky industry has welcomed the UK-Australia Free Trade Agreement (FTA) which has removed the 5 per cent tariff on Scotch Whisky.

Commenting on the Agreement in Principle reached over a UK-Australia Free Trade Agreement, which eliminates a 5 per cent tariff on Scotch Whisky, Chief Executive of the Scotch Whisky Association Karen Betts said: "It's very good to see the removal of the 5 per cent tariff on Scotch Whisky in the Agreement in Principle between the UK and Australia. This will help Scotch Whisky distillers continue to expand exports to Australia, which have almost doubled over the last decade, making Australia our eight largest market by value. It's also important to us that trade with Australia is now tariff-free for Scotch Whisky – our preference is always for tariff-free trade, which enables Scotch Whisky to compete on a level playing field and on the strength of our reputation for quality.

"We await further details of the Agreement in Principle. A framework for addressing regulatory barriers to trade with Australia, to ensure greater legal protection and tax fairness for Scotch Whisky, is also important to us, and – if delivered in this agreement – will be a real boost for the industry," he further added.

The UK said the deal will mean products such as cars, Scotch whisky, biscuits and ceramics will be cheaper to sell to Australia, a former British colony. It will also enable UK citizens under 35 to travel and work in Australia more freely. Going the other way, the deal will eliminate tariffs on Australian goods such as wine, swimwear and confectionery imported into the UK.

The UK is Australia's eighth-largest trading partner and Australia the UK's 20th-largest, with two-way trade worth 26.9 billion Australian dollars ($20.7bn). Before the UK joined the then European common market in 1973, it was Australia's most lucrative trading market.