THE latest official figures on Scotch whisky exports, which revealed overseas sales fell to their lowest level in a decade, will have made for difficult reading for distillers when they were announced on Friday. They should also serve as a wake-up call for the UK Government if it wants to ensure the continuing prosperity of a sector that contributes so much to the economy, especially in fragile, rural economies.

To recap, whisky exports plunged by more than £1.1 billion to £3.8bn in 2020, a drop of 23 per cent in value compared with 2019. The figures, published by the Scotch Whisky Association, betray the hugely detrimental impact which the continuing US import tariffs are having on distillers.

Since their introduction by the Trump administration in October 2019, as part of a long-running trade dispute between the US and European Union over aircraft subsidies, the 25% import tariff on single malt is estimated to have cost the industry an eye-watering £500 million in lost exports.

Indeed, the measure was cited by the SWA as the single biggest contributor to the overall fall in exports, with exports to the US – traditionally the industry’s most-lucrative overseas market – tumbling to £729m, £340m less than in 2019. It has been a bitter pill to swallow for the industry, with the situation all the more frustrating given the apparent lack of progress to resolve the dispute.

The tariffs, which have also been applied to other Scottish goods such as cashmere, have their roots in a complicated dispute that began while the UK was a member of the EU. Post-Brexit, the UK has been free to make direct representations to Washington to try and resolve the issue, but no headway has been made.

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In fact, the US Trade Representative said just last week that it is “unnecessary at this time” to revise the tariffs, meaning they could be in place for another six months. On the basis of what we have seen to date, the industry is staring down the barrel of yet more hefty export losses, and all the risks to jobs and investment in Scotland that come with it.

Whisky insiders are hopeful of a more immediate change in strategy when Joe Biden nominee Katherine Tai takes over as Trade Representative, as successor to Trump pick Robert Lighthizer.

There is certainly already evidence that the new president is keen to re-engage with the wider world in a more conciliatory, diplomatic way than Trump. His move to recommit the US to the Paris Agreement on climate change and to the World Health Organization are evidence of that.

Talking to The Herald on Friday, the chief executive of Chivas Brothers, Jean-Christophe Coutures, was optimistic a deal could be done on tariffs, despite the latest extension. His confidence stems at least partly from the fact the US chose not to escalate the dispute last week.

While such optimism is welcome, it does not remove the heavy cost the industry continues to bear in the meantime.

READ MORE: Trump tariffs delay Scotch distiller's US expansion

Mr Coutures did not shy away from that fact, declaring that a combination of the tariffs and the coronavirus crisis, which has forced the closure of vast tracts of the hospitality sector and hit sales in the travel retail sector, has “absolutely hammered” the industry.

He was also correct to point out the disproportionately heavy impact which the ongoing tariffs are having on smaller single malt producers. While big guns such as Chivas owner Pernod Ricard and Diageo are better equipped to ride out the impact, given the breadth of their product ranges and global footprint, the import barrier has made it extremely difficult for smaller fish to access the US market.

But the US is not the only difficult arena for small and craft whisky distillers. A report in the Financial Times on Sunday highlighted the difficulties that many such players are now facing in selling into the EU because of the additional bureaucracy and costs arising from Brexit.

The report highlighted difficulties in securing space for single pallets with distributors bound for the European mainland, a lack of customs officials to deal with increased checks, and a general unpreparedness across the supply chain for the different excise regimes across Europe.

It is hardly helpful for an industry bidding to recover from coronavirus, which was a major contributor as exports to the EU fell by 15.1% to £1.26bn last year.

Mr Coutures said it is small distillers that give single malt the diversity and innovation that whisky lovers crave. Between US tariffs and EU red tape, there is a real danger of that lifeblood draining away.