Trade truce as US suspends UK tariffs on whisky, wine and other goods

By Kelly McCarthy

The United States has suspended its 25% tariffs on some United Kingdom exports including European wine, single malt Scotch whiskies, biscuits, clotted cream, and other goods.

"The United Kingdom and the United States are undertaking a four-month tariff suspension to ease the burden on industry and take a bold, joint step towards resolving the longest running disputes at the World Trade Organization," the U.S. Trade Representative said in a joint statement.

Secretary of State for International Trade and President of the Board of Trade Elizabeth Truss shared the news on Twitter Thursday to announce the removal of the 25% tariffs.

BREAKING: I've agreed with the US to remove retaliatory tariffs on a range of UK goods:

✔The removal of Scotch whisky tariffs of 25%
✔Removal of tariffs on cashmere, machinery and other products
✔A joint de-escalation of the Boeing-Airbus dispute #BuildBackBetter 🇬🇧 🇺🇸 pic.twitter.com/o8ETkRp3jB

— Liz Truss (@trussliz) March 4, 2021

Prime Minister Boris Johnson replied in a subsequent tweet hailing the decision as a win for U.K. businesses and international relations.

John Keeble/Getty Images, FILE

In this Oct. 23, 2019, file photo, bottles of 12 years old double cask Macallan highland single malt scotch whisky are displayed during the RM Sotheby's London, European car collectors event in London.

"From Scotch whisky distillers to Stilton-makers, the U.S. decision to suspend tariffs on some U.K. exports today will benefit businesses right across the U.K.," he said. "Fantastic news as we strengthen the UK-US trading relationship and work to build back better from the pandemic."

The tariffs originally laid out by the USTR stemmed from a 17-year dispute over U.S. subsidies to Boeing in which the nation targeted billions of dollars worth of EU exports with taxes.

Yonhap/EPA via Shutterstock

Shoppers look at bottles of wine at a store in Seoul, on March 4, 2021.

U.S. wine, spirits and restaurant coalitions respond

Scotch whisky was one of many key exports that hit producers with millions in losses for various distilleries and left restaurant owners in the U.S. reeling with increased costs.

"We applaud President Biden's decision to suspend these tariffs. It's a smart step -- to resolve trade tensions," Andrew Fortgang, James Beard Award-nominated co-owner and wine director of Le Pigeon and Canard in Portland, Oregon, said in a statement for the Coalition to Stop Restaurant Tariffs leadership. "But it is only a small step on the path to the restaurant industry's recovery."

Noam Galai/Getty Images, FILE

In this Dec. 19, 2020, file photo, a person delivers food supplies outside a restaurant in New York.

Fortang explained that the restaurant industry in the U.S. relies on wine, food and spirits from across Europe.

"We need all tariffs on those products scrapped. We're starting to see signs of hope, with all adults expected to be vaccinated by May and a major aid program working its way through Congress now," he added. "The major missing piece in our recovery is removal of all wine, food and spirits from this 17-year-old battle over aircraft subsidies."

The Coalition to Stop Restaurant Tariffs represents restaurants in all 50 states and is further calling on the Biden administration to "end all additional tariffs on European food, wine, and spirits."

Ben Aneff, president of the U.S. Wine Trade Alliance, thanked the Biden administration for the decision to suspend the 25% tariff on European wines and "relieve U.S. businesses of this burden."

"USWTA is thrilled with today's decision," Aneff said in a statement. "Wine tariffs have no place in an aircraft subsidy dispute between Europe and the United States. A tariff-free environment will increase jobs and lower costs for millions of consumers, which is critical as we begin to emerge from the worst pandemic in a century."

He continued, "The food and wine tariffs have threatened the livelihoods of America's 47,000 wine retailers and 6,500 small importers and distributors. These firms can now focus on rebuilding their businesses in the wake of the pandemic, which has devastated the small businesses around the country that depend on these products."

Aneff explained that American wine businesses have "long been the ones paying the tariff" and that "every $100 million worth of damage the wine tariff inflicts on European businesses brings over $400 million in damage to U.S. companies."

What's next?

Fortgang called this a huge help in the fight for bars and restaurants in the wake of COVID: "Every dollar a restaurant saves on necessary goods buys us more time to exist and adds up to another job maintained. It matters."

Now, he said their group will push for talks with the USTR, members of Congress, "and anyone we can to let them know that these tariffs on food and wine hurt small business here, at a time we can least afford it."

The end goal for the U.S. wine and spirits market, he added, is to create a lasting solution with policymakers to "keep EU food, wine, and spirits off the tariff list in this aviation dispute" and "scrap tariffs permanently."