Tit-for-tat tariffs resulting from a US-EU trade dispute on goods including Scotch whisky and US bourbon should be removed to show "good will" as the UK seeks a trade deal with America.

Last week it emerged that American's 25% tariffs imposed on EU goods, including single malt Scotch whisky, is to stay in place.

The Scotch Whisky Association had urged the UK and US Governments to hold talks, to try to resolve the dispute.

The industry has warned that Scotch whisky exports are facing a £100 million loss this year if the US continues to impose its tariffs on the product.

International Trade Secretary Liz Truss told MPs she pressed US trade representative Robert Lighthizer last week for an "urgent settlement" ahead of trade talks.

The World Trade Organisation last year gave the US the green light to impose tariffs on up to 7.5 billion dollars (£6.1 billion) of goods from the European Union as retaliation for illegal subsidies the bloc gave to plane-maker Airbus, and these tariffs will include Scotch whisky.

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

The EU hit back by placing tariffs on US goods, including bourbon whiskey.

Former Scotland secretary David Mundell said the 25% duty applied to Scotch whisky was a "cloud on the horizon" of any UK-US trade talks.

The Herald: Scottish Secretary David Mundell

He added: "What confidence can the secretary of state give us that at the end of this process we'll see no duties on Scotch whisky of any kind in the United States and no duty on on bourbon in the United Kingdom?"

In response, Ms Truss said: "This is a major issue for our excellent Scotch whisky producers and also other producers such as Walkers Shortbread and cashmere producers as well.

"I raised this issue again with (US trade representative) Lighthizer again when I saw him last week.

"I want to see an urgent settlement of the Airbus-Boeing dispute so we can remove these retaliatory tariffs on things like bourbon, Harley-Davidsons and Florida orange juice as well as our excellent products here in the UK.

READ MORE: Scotch whisky industry says it faces £100m loss this year if US tariffs continue

"And I am urging as an early part of these trade negotiations removal of existing tariffs to show good will towards the negotiations."

In 2018, Brussels imposed a 25 per cent tariff on imports of US whiskey into the EU in response to American tariffs on European steel and aluminium. A year later, the US retaliated, imposing a 25 per cent tariff on imports of single malt Scotch whisky in the long-running dispute over EU and American subsidies to Airbus and Boeing.

Scotch and American whiskies had  traded tariff-free across the Atlantic for over 25 years.

Former international trade secretary Liam Fox said UK exports to the US currently attract £500 million in tariffs.

He added: "The removal of which would be an immediate boost to the UK economy.

"But that the opportunity's even greater because we're currently involved in retaliatory tariffs as a result of the EU-US steel dispute and we are subject to tariffs that the US never wanted to apply to the UK.

"And as we separate ourselves from the European Union we can remove ourselves from the ensnarement of that which will enable us to remove many other tariffs which will beneficial to consumers and businesses on both sides of the Atlantic."