Brexit May Mean Cheaper Scotch and British Wine in the U.S.

The United Kingdom's Brexit from the European Union is often painted as either good or bad, but regardless of the overall scope, the actual implications are a laundry list of smaller pros and cons. One example: The U.K. will now be able to break from the E.U.'s tariff policies, and for American lovers of Scotch and British wine, that could be a big positive.

In October of 2019, the Trump administration slapped tariffs on many wines from four EU countries—France, Germany, Spain, and the United Kingdom—as well as other products, including Scotch whiskey (from Scotland in the U.K.), as part of an ongoing aerospace trade dispute. Then, last month, the E.U. added on an estimated $4 billion in retaliatory tariffs, essentially escalating the deadlock, at the very least until the Biden administration takes over.

But with the United Kingdom set to leave the E.U. on January 1, the British government has reportedly stated they plan to use their newfound freedom to immediately dump their tariffs on U.S. goods related to the aerospace dispute. "As an independent trading nation once again, we finally have the ability to shape these tariffs," explained the U.K.'s International Trade Secretary Liz Truss according to the BBC. "Ultimately, we want to de-escalate the conflict and come to a negotiated settlement so we can deepen our trading relationship with the U.S. and draw a line under all this."

Much of the attention around Trump's tariffs has been focused on its effect on French wine imports, but as Karen Betts—chief executive of the Scotch Whisky Association—pointed out, her industry has seen a major fallout as well. "[These transatlantic trade disputes] have seen Scotch whisky exports to the U.S. fall by over 30 percent in the past year," she was quoted as saying. "We now call on the U.S. government to reciprocate by suspending the tariffs on U.K. goods stemming from the Airbus-Boeing dispute, so that industries in the U.K. and the U.S. affected by this dispute can once again trade freely."

In theory, axing these tariffs will reduce the price American consumers have to pay for products like Scotch and increasingly-popular British wines. However, it's not clear whether the U.S. government, even under Biden, may bite, or how long this tariff removal will last—in part because the booze tariff situation is a slightly more tangled web: The U.K. reportedly plans to keep tariffs on products like American whiskey which were put in place over a separate steel and aluminum dispute.

Still, the hope is that removing one set of tariffs will be enough to put a deal in motion. "[We] have long argued that the tariff war shouldn't be extended to sectors beyond those directly involved in the dispute," Miles Beale, chief executive of the U.K.'s Wine and Spirit Trade Association (WSTA), said according to The Drinks Business. "We hope that this step will be welcomed by the U.S. and act as a catalyst to solve not just the aircraft related disputes but also provide space for the U.K. to be removed from the 232 Steel Tariffs and ultimately allow us to see a return to tariff free trade in U.S. Bourbon and whiskies, as well as all U.K. wines and spirits."