Dinnae Fash, Because Scotch Whisky Is About To Get Cheaper
The Trump administration's hawkish trade policy walloped the food and beverage industry, leading to high tariffs on a host of luxury goods. Last June, Fortune reported that the dispute had cost the American whiskey industry as much as $300 million—so recent news on the whiskey/whisky front is especially welcome. Late last week, Food & Wine reported that the U.S. would temporarily suspend retaliatory tariffs on several European products, including everyone's favorite Scotch sipper.
The New York Times explains that the deal would suspend a 25% tariff imposed by Europe on American rum, brandy and vodka, in addition to a 25% tariff the U.S. imposed on liqueurs and cordials from Germany, Ireland, Italy and Spain, as well as cognacs and other grape brandies from France and Germany. Finally, the U.S. declared it would temporarily suspend tariffs levied against the United Kingdom—including on Scotch whisky, hello—for a period of at least four months.
As Food & Wine reports, the original trade dispute wasn't really about spirits at all. Whisky is just collateral damage in a decades-long aerospace industry dispute over subsidies to Boeing and Airbus exacerbated by Trumpian economics. Regardless, this is big news for Scotch whisky; The New York Times reports that scotch coming into the U.S. was hit with an additional 25% tariff in October 2019, and exports have dropped by 35% over that time.
The temporary tariff suspension is promising, but the continued goodwill depends on future negotiations. American Distilled Spirits Alliance President Matt Dogali told Food & Wine: "This four-month suspension shows real commitment on the part of both the United Kingdom and United States governments to drawing a line under a recent period of excess protectionism that has hammered the distilled spirits industry in both countries, leaving the sector as a whole worse off. While this suspension only applies to a segment of distilled spirits harmed by this trade war, it is a good first step towards returning to normal trade relations, which we hope can be accomplished before June of this year." In the meantime, there's never been a better excuse to order a bottle (or five).