Whiskey makers raise their glasses after the UK and US agreed to suspend retaliatory tariffs on goods, including Scotch malts, for five years as part of the de-escalation of a dispute transatlantic trade that dates back almost two decades.
Liz Truss, Britain’s international trade secretary, said a “historic deal” had been reached with Washington to ensure that the tariffs, which affected UK exports to the US worth £550million, remain suspended.
It comes after the Biden administration agreed to a similar deal with the EU on Tuesday, as governments on both sides of the Atlantic take bigger steps to resolve tensions over subsidies to planemakers Airbus and Boeing. .
The 17-year dispute, the longest in the history of the World Trade Organization, had led to damaging tariffs being levied on products from both sides over disagreements over support for the production of large civilian jets .
British goods that had been targeted by the tariffs – border taxes paid by buyers of goods from another country – included cashmere, machinery and single malt Scotch whisky.
The Scotch Whiskey Association said the past two years of tariffs – first imposed by Donald Trump – had been hugely damaging to the industry, with more than £600million lost in exports to the United States caused by a 25% customs duty on single malt. Karen Betts, chief executive of the trade body, said: “This agreement removes the threat of a reimposition of tariffs on Scotch whiskey next month and allows distillers to focus on resuming exports to our market in largest and most valuable export.”
Pig farmers in Yorkshire, Stilton cheese makers in the Midlands, cashmere growers in Ayrshire, builders of construction vehicles and producers of liqueurs and cordials had been hit by tariffs on tens of millions of export books.
Britain had been involved in the dispute as an EU member, but eased tensions earlier this year by unilaterally suspending tariffs on the United States. The government said that encouraged the United States to agree to a four-month suspension on tariffs until the two sides negotiate a longer-term deal.
The UK and US will now work together to put the agreement into practice and strengthen cooperation in the large civil aircraft sector, he said.
It comes after Liz Truss met US Trade Representative Katherine Tai in London on Wednesday.
“Today’s agreement puts an end to an incredibly damaging problem and means we can focus on improving our trade relationship with the United States, including working more closely to challenge unfair practices by countries like China and using the power of free trade to build better recovered from the pandemic,” Truss said.