US tariffs costing £360m a year but Westminster government can’t get “special friend” Trump to move an inch

Scotland creates the finest whisky in the world and with many world-renowned, long established distilleries, as well as several newer players emerging, there’s no doubt that Argyll & Bute with its 15 distilleries and two designated whisky regions, has made and continues to make a significant contribution to popularity and success of Scotch Whisky. 

Scotch Whisky employs around 11,000 people – including 7,000 in rural locations – and in 2019 global exports made almost £5 billion for the Treasury. The Scotch Whisky industry also accounts for 20 per cent of UK food and drink exports. It is a global success story, a major employer and an industry which supports a large supply chain.

Since first being elected chair of the All-Party Parliamentary Group on Whisky in 2015, I have worked hard to ensure that the industry is supported in the Westminster parliament and its interests promoted and its employees protected.

the Scotch whisky industry….has faced real challenges; none of which were of its own making.

In the midst of a global pandemic we have seen employees at many of our distilleries turn their hand to making hand sanitiser and other products which will benefit their communities. Their role in providing skilled work and contributing to the local economy is much valued but the industry is facing significant challenges ahead; challenges which could affect the jobs of hundreds of people across Scotland and the communities in which they live and work.

Since the EU referendum result of June 2016, the Scotch whisky industry, which relies heavily on having a strong, reliable export market has faced real challenges; none of which were of its own making. Until now the industry has had all the benefits of free trade within the EU single market and has been able to take advantage of EU negotiated deals around the world. Now, with the likelihood of a no-deal Brexit looming, Scotland’s biggest export industry faces being hung out to dry by an incompetent government’s pig-headed refusal to negotiate properly with the European Union.

It is our small, independently owned distilleries, many who have invested everything into the US market, who will find this storm much, much more difficult to ride out.

Adding to the uncertainty caused by Brexit and the Covid-19 pandemic is the totally unjustified and punitive 25% tariffs that the United States placed on Single Malt Scotch Whisky exactly one year ago today, as part of the continuing Airbus-Boeing dispute with the UK Government and the EU.

Despite making the removal of these tariffs a priority and despite having the full support of the distillers, the trades unions and politicians from across parliament, the UK Government has failed to have their “special friend” in the White House move an inch on this matter, meaning the £360 million the industry has already lost due to US exports falling by a third in the last twelve months will be added to by £30 million for each month they remain in place.

However, even a change in the administration on Capitol Hill won’t guarantee a speedy resolution to this situation as both the Speaker of the USA House of Representatives, Nancy Pelosi and the Democratic presidential candidate, Joe Biden have warned there will be “absolutely no chance” of a trade deal passing Congress should the UK Government break international law by overriding the EU Withdrawal Agreement and breaking International Law…something the UK Government has admitted their UK Internal Market Bill does.

These are extremely worrying times for the industry and while the big multi-national drinks companies such as Diageo and Beam Suntory – owners of our famous Bowmore and Lagavulin distilleries – may be able to absorb these extra costs, it is our small, independently owned distilleries, many who have invested everything into the US market, who will find this storm much, much more difficult to ride out.

Ultimately of course this will have impact on jobs and a few weeks ago, I convened a meeting of SNP MPs and representatives of trades unions including the GMB, which has been running a high-profile campaign to raise awareness of the tariffs and the impact this could have on communities across the country.

I was delighted to be joined by no fewer than 17 SNP MP colleagues and to hear from them and trades union spokespeople about the impact this is having on the industry and the very real fear of job losses across the country.

We will continue to work closely with our friends in the GMB as well as reaching out to politicians and trades union representatives in the US, including Teamsters, American’s biggest union so that we can keep up the pressure to have Trump’s tariffs removed as quickly as we can, before this vital industry is damaged further .

Today (Thursday, October 8) at International Trade Questions in the House of Commons, to mark the one-year anniversary of the Trump Tariffs, I asked why having promised so much a year ago, the UK government had delivered so little. You can hear my question here: https://www.facebook.com/BrendanOHaraSNP/posts/2607380566182102