Sales of Scottish whisky could drop by 20% within a year due to new tariffs placed on exports to the US, it has been claimed.
The tariffs, approved by the World Trade Organisation, have been imposed by the US on £6.1bn of EU exports in response to the bloc’s subsidising of plane-maker Airbus.
Other industries being targeted include European cheeses, olives and aircraft.
Tariffs are paid by the importing country.
The 25% levy on single malts from Friday is bad news for the Scottish whisky industry, as the US accounts for an estimated 10.8% of global volume and 22% of global value of the drink.
Karen Betts, chief executive of the Scotch Whisky Association, said: “This is very bad news for our industry.
“It means that Scotch whisky is now paying for over 60% of the UK’s tariff bill for the subsidies it provided to Airbus, eight times more than the next most valuable UK product on the tariff list.
“That single malts are being targeted is particularly damaging for smaller producers, who stand to be the hardest hit.
“Scotch whisky has been imported tariff-free to the United States for the last 25 years.
“This move undermines decades of hard work and investment which has seen Scotch whisky sales boom in the US. It will impact both our industry and its supply chain.”
Ms Betts added: “In time, consumer choice will diminish and Scotch whisky companies will start to lose market share.
“In Scotland and throughout our UK supply chain, we expect to see a dropping-off in investment and productivity. Ultimately, jobs could be at risk.”
She urged the UK and Scottish governments to step in and help the industry maintain its competitiveness globally, while continuing work to have the tariffs scrapped.
Diageo, one of the country’s biggest spirits companies, said it would take “mitigating actions” but a spokeswoman added: “We are concerned about the impact on smaller, independent Scotch distillers and the damage this could do to industry exports and jobs across Scotland.”
Scotland Office minister Colin Clark said: “The whisky industry is a cornerstone of Scotland’s economy, employing around 11,000 people, many in rural areas. It is one of our greatest exporting success stories, worth more than $1.5bn (£1.17bn) last year in the US alone.
“The UK government has raised the issue at the highest levels with both the EU and the US, including with President Trump and will continue to do so until these tariffs are dropped.”