Johnnie Walker maker Diageo welcomes end to tariffs on whisky exports to US
The Biden administration said it would cut the 25% tariff rate on whisky exports to zero for four months, creating what Diageo chief executive Ivan Menezes described as “a very good day for Scotch and Scotland.”
The tariffs were first imposed by the Trump administration over the row on subsidies at Airbus and Boeing when the UK was in the European Union.
Menezes said: “We recognise the Government’s tireless efforts, using the UK’s newly independent trade policy, to deliver the suspension and hopefully in time, a permanent end to these punitive tariffs.
“We pay particular thanks to the Prime Minister, Liz Truss, Alister Jack and their teams for speedily negotiating this truce with the new US Administration.
“Final resolution of the aerospace dispute, combined with the announcement of a continued freeze on spirits duty in yesterday’s Budget, will safeguard thousands of jobs across Scotland and the UK.”
Diageo was the biggest beneficiary by far from the truce.
Diageo shares gained 0.5p to 2877.5p.
Today’s move by the Biden government is effectively a reciprocation of Truss’s move to suspend UK tariffs last year. The Trump administration had not reciprocated.
The deal is not expected to lead to a wider trade deal with the US as it is specifically in relation to the aerospace dispute.
Cashmere, Stilton cheese and aerospace will all be helped by the lifting of US tariffs.
Losses to Scotch whisky exports alone were last month estimated to have reached £500 million since they were imposed in October 2019.
The tariffs were initially imposed by Trump in retaliation for EU state support given to Airbus.
