Whisky prices in the U.S. are expected to drop significantly in the coming days, including popular single malt scotch whisky, after the implementation of a temporary tariff suspension this week.
The U.S., the United Kingdom and the European Union (EU) have reportedly negotiated a deal to temporarily remove tariffs on certain goods, including whisky, for a period of four months.
The tariffs were originally put in place in 2019 as part of a tit-for-tat measure during the trade conflict that involved the European Union after disagreements emerged relating to Boeing and Airbus subsidies. Many of the tariffs remain in place even after the U.K. left the EU at the end of 2020.
The conflict began during the Bush administration after the U.S. filed a World Trade Organization case against the European aerospace company for allegedly accepting over $22 billion in illegal subsidies.
The UK hit back and alleged that Boeing had also received some $23 billion in illicit assistance.
As part of origin labels distilled products made in Scotland, Canada, or Japan are spelled whisky, but those made in the United States or Ireland, use the spelling-whiskey.
Since the tariffs were imposed, prices of items such as Scottish whisky surged to new highs. The Scotch Whisky Association said that the tariffs had resulted in lost business of over $690 million. Whisky was the UK's largest food and drink export last year. The industry employs more than 50,000 people and is a major contributor to Scotland's economy.
British Prime Minister Boris Johnson praised the agreement and said that the lifting of the tariffs is sure to be a boon for the industry.
"From Scotch whisky distillers to Stilton-makers, businesses across the UK will benefit from the US decision today to suspend tariffs in this dispute," Johnson said.
Johnson said that he hopes to further strengthen the relationship between the two nations and support free and fair trade.
The lifting of the tariffs, which will begin this week, was the result of a conversation between U.S. President Joe Biden and European Commission President Ursula von der Leyen.
Leyen said in a statement that the deal will be excellent news for businesses from both countries. She said that the U.S. and the EU will be establishing a ministerial-level Trade and Technology Council to find other possible beneficial measures.
