Single malt exports to the USA could fall by a fifth in the next year due to the introduction of a new import tariff from today.
The Scotch Whisky Association (SWA) has issued the warning after the 25% tariff was introduced by the Trump administration as part of an ongoing trade war with the EU.
Scotch whisky has been imported tariff-free to the United States for the last 25 years. During this time the value of the exports to the US grew from £280m in 1994 to over £1 billion last year.
SWA chief executive Karen Betts said the tariff would be very bad news for the industry.
“We estimate that 25% tariff on single malt Scotch whisky will see exports to the US drop by as much as 20% in the next 12 months, as Scotch whisky will become less competitive in the US market.
“In time, consumer choice will diminish and Scotch whisky companies will start to lose market share.
“In Scotland and throughout our UK supply chain, we expect to see a dropping-off in investment and productivity. Ultimately, jobs could be at risk.”
Ms Betts said the SWA expected the damage to the industry to mirror the impact caused to exports of American whiskies to Europe since the EU imposed a 25% tariff in July last year.
“That tariff has done nothing other than damage an industry very similar to and closely linked with our own,” she said.
“Alongside American whiskey companies, we have called on the UK, US and EU governments for many months now to find a negotiated solution to the trade disputes that have given rise to these tit-for-tat tariffs.”
Last year the US market accounted for 22% of global value and 10.7% of global volumes of Scotch whisky exports.
A total of 137 million bottles of Scotch whisky were exported to the US in 2018 – more than four bottles every second.