The Scotch whisky industry has welcomed a deal between the UK and US governments that has seen damaging tariffs, imposed by the Trump administration in 2019, suspended for four months.

The 25% tariff fell under a range of European products targeted as part of a historical row over government subsidies given to European aerospace firm Airbus and to US plane-maker Boeing.

Just last month, the Scotch whisky sector said the penalty applied to single malt, in a dispute not of its making, had accounted for more than £500m of export losses.

The suspension of the US tariffs, which also cover some other UK-made products including cheese, allows time for a permanent agreement to be reached following the UK’s unilateral decision at the end of the Brexit transition period to lift retaliatory tariffs imposed by the EU on some US goods.

A joint statement said: “The United Kingdom and the United States are undertaking a four-month tariff suspension to ease the burden on industry and take a bold, joint step towards resolving the longest running disputes at the World Trade Organisation.

“This will allow time to focus on negotiating a balanced settlement to the disputes, and begin seriously addressing the challenges posed by new entrants to the civil aviation market from non-market economies, such as China.”

It was October 2019 when Donald Trump signed off on tariffs covering £6.1bn of EU goods including food, wine and spirits.

Trade secretary Liz Truss said: “I am delighted to say that our American allies – under their new president and his hard-working staff at the US Trade Representative – have embraced our move to seek a fair settlement.”

The Scotch Whisky Association’s chief executive, Karen Betts, responded: “The tariff on single malt Scotch whisky exports to the US has been doing real damage to Scotch whisky in the 16 months it has been in place, with exports to the US falling by 35%.”

Diageo – home to the Johnnie Walker brands – also welcomed the development.

Its chief executive, Ivan Menezes, said: “Today is a very good day for Scotch and Scotland.

“We recognise the government’s tireless efforts, using the UK’s newly independent trade policy, to deliver the suspension and hopefully in time, a permanent end to these punitive tariffs.”

He added: “Final resolution of the aerospace dispute, combined with the announcement of a continued freeze on spirits duty in yesterday’s budget, will safeguard thousands of jobs across Scotland and the UK.”

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