The world of whisk(e)y can be a messy business. Federal (and local) regulations, taxes, and tariffs can have a pretty big effect on the price of your bottle of bourbon, scotch, or Irish whiskey before it ever hits shelves. This has been made even clearer over the past few years, because of ex-President Donald Trump’s trade wars. But drinkers definitely got some good news on that front this week, when the new U.S. administration and the U.K. government jointly decided to suspend trade tariffs on Scotch whisky imports to the U.S. (along with cheese and wool).
As of March 8th, all tariffs will be reduced to zero for a four-month “show of good faith” while trade deals between the two nations are renegotiated. So how did we get to this point, where trade negotiations are dominating whisky news? Back in 2019, the U.S. decided to put a 25 percent tariff on food and drink imports (amongst other imports) from the EU/U.K. as a tactic to move along the seemingly never-ending Boeing/Airbus trade war which started 16 years ago.
🚨 BREAKING: UK and US agree to four-month suspension of #ScotchWhisky tariffs!
The trade dispute has cost the industry over £500m in lost exports.
— Scotch Whisky Association (@ScotchWhiskySWA) March 4, 2021
Over the 16 months that the tariffs were in play, they applied to every bottle sent over the Atlantic from Scotland. Naturally, the Scotch industry suffered. A lot. The Scotch Whisky Association said in a statement last month that the industry has lost 35 percent of its export business, creating a $635,000,000 loss for the overall industry in Scotland.
That’s pretty goddamn steep. Especially for an industry that has nothing to do with aviation.
As a matter of retaliation, the U.K. and the EU levied tariffs on U.S. booze. That, in turn, caused imports of American spirits (bourbon particularly) to decline by 53 percent, hurting the industry to the tune of over $70,000,000 over a two year span. Those tariffs have not been lifted by the U.K. or EU in return. In fact, tariffs on U.S. spirits heading to the EU are set to rise to a whopping 50 percent in June of this year. At which point the U.S. is set to levy a 25 percent tariff on all brandy and wine coming in from France and Germany.
Obviously, when you’re dealing with geopolitics, things get messy in a hurry. But in the end, there’s a human cost to all this. It’s the workers at these distilleries who are losing their jobs.
So what does this mean for you? Nothing… yet. While the tariff freeze went into effect last week (it was backdated to March 4th, 2021), you are unlikely to see any change in price right away. The bottles on the shelf now pretty much all came over with that 25 percent tariff on top. It’s not magically going away.
Moreover, and let’s be real here, whisk(e)y retailers are not exactly known for their egalitarian pricing on bottles of booze. We may, however, see some change in prices come during the holiday season as shelves are restocked in anticipation of a huge shopping quarter. That’s a big “if,” of course, depending on whether this four-month tariff suspension actually lasts that long.
To be sure that there wasn’t any immediate change, we checked prices from last week’s scotch roundup (published before the tariff was suspended) against prices for those same bottles today. There is no change. Still, whisk(e)y aficionados can rest assured that scotch distilleries are racing to get their expressions into the country ASAP — they fully understand that lower sticker prices make buying decisions easier.
If you’re eyeing special bottles, it’s fair to anticipate marginally cheaper scotch later in the year. At the very least, importers are going to be buying more of it and pushing it on retailers. Even if the tariffs come back, there will be a small window at some point that can be exploited by collectors and anyone trying to stock their bar carts.
Until then, we’re going to keep using the cheap stuff for our highballs!
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