The US Government’s tariff on whisky could be a bigger threat to the industry than the coronavirus crisis, MPs have been told.
Karen Betts, chief executive of the Scotch Whisky Association, said the levy has the potential to do long-term damage to the industry’s market share.
Donald Trump introduced a 25% tariff on the spirit as part of a trade dispute related to EU subsidies for Airbus, which came into effect in October last year.
Ms Betts gave evidence to the Scottish Affairs Committee at Westminster on Thursday as MPs look into the impact of the Covid-19 on the food and drink sector.
She said: “A 25% tariff was imposed in October last year.
“In the first six months of that tariff being in place, our exports to the United States fell by 25%, and the United States is our biggest and most valuable market so that’s really significant.”
Exports to the US in April were down 47%, she said, as the impact of both the tariff and the coronavirus lockdown were felt.
She said: “If we can’t resolve this US tariff issue it is a more strategic threat to the industry than Covid is.
“Because there is a risk that we start to lose longer-term market share that takes a very long time to win back.”
Negotiations between the US and EU to resolve the trade dispute are unlikely to take place before the presidential election in November, she said.
The Office of the US Trade Representative indicated on Wednesday that further tariffs on goods could be imposed, including gin, shortbread and cashmere.
Ms Betts said it is “critical” to resolve the dispute in the next few months, adding 70% of the UK’s gin is produced in Scotland.