Scotch Whisky, Scotland’s widely recognised favourite national drink, is facing its most serious economic crisis. That’s made even tougher with a 10% tariff on all imports into the United States. The ramifications from this tax are profound. The US is the largest export market for Scotch Whisky in 2024, bringing in close to £1 billion in sales. Naturally, the Scottish government is lobbying hard to see this tariff cut or scrapped altogether. They think it’s essential for the industry’s long-term viability and for its expansion.
Home to more than 150 distilleries producing Scotch Whisky in every corner of Scotland, the industry directly employs around 14,000 people. Scotch Whisky is a major employer across Scotland. It’s playing an important role in supporting another 41,000 jobs there and more than 25,000 jobs all over the rest of the United Kingdom. This massive influx of employment underscores the importance of the Scotch Whisky industry to Scotland’s overall economy. It greatly contributes to levelling up the UK as a region.
Last year, Scotch Whisky exports had a record value of £5.4 billion. About one-fifth of these exports go to the United States, underscoring its importance in the global market. The cumulative effect of the continued 10% tariff has been a crushing blow. It’s costing businesses an estimated £4 million per week. This loss is an enormous financial burden and existential threat to the profitability and viability of hundreds of distilleries.
In addition, the Scottish government notes that the proposed new 10% tariff would be much lower than the 15% export tax the EU is introducing on imports from the UK. Leaving Scotch Whisky at a competitive disadvantage to other markets. All major markets for Scotch Whisky, including Australia, the EU and Singapore have zero tariff policies on UK Scotch Whisky imports. This costs Scottish producers dearly, creating an uneven playing field. Conversely, India has one of the highest tariff rates in the world, a shocking 150% tariff on Scotch Whisky imports.
Industry leaders claim that the tariff on Scotch Whisky imports to the US is a base rate. They agree that this tariff is challengeable for exemption given its strategic importance to both economies. They assert that removing or reducing this tariff could bolster trade relations between Scotland and the US while fostering economic growth in both regions.
The bitter fight that has raged around the tariff has forced restaurateurs, distillers, lobbyists, and UK politicians to battle for the fate of the Scotch Whisky industry. Some experts argue that without immediate action to alleviate these financial burdens, Scotland’s distilleries may struggle to compete effectively in the global market. Furthermore, the resultant loss of jobs and economic contributions would prove to have long-lasting ramifications for both Scotland and the rest of the UK.