China has agreed to reduce the import tax on Scotch whisky from 10% to 5%, following a trade deal between the United Kingdom and China that is estimated to be worth £250 million to the UK economy. The move is intended to improve access for Scotch whisky producers to China, which is the sector’s tenth largest export market.
The agreement comes after recent discussions between Prime Minister Keir Starmer and President Xi Jinping, and has been welcomed by UK ministers as a significant step for both the Scotch whisky industry and the wider British economy.
China cuts Scotch whisky tax for UK exporters
Chinese authorities have announced that tariffs on Scotch whisky imports will be reduced by half, dropping from 10% to 5%. This development is expected to make it easier for Scottish producers to compete in one of the world's largest consumer markets, enhancing export opportunities for the industry.
According to the UK government, exports to China of Scotch whisky play a significant role in supporting employment and income, with China considered the tenth largest market for the spirit by value.
Significance for the Scotch industry
The tariff reduction is anticipated to provide a £250 million boost to the UK economy, with the Scotch whisky industry well-placed to benefit. Scottish producers have long regarded the Chinese market as key to their export strategies, given its population of 1.4 billion and a growing middle class interested in premium products.
Kirsty McNeill, Scotland Office minister and MP for Midlothian, stated: 'Tariffs for Scotch have been halved into what is the tenth largest market. This is worth about £250 million to the UK economy, it's a great deal for Scotch which makes it a great deal for Scotland.'
Details of the UK-China trade agreement
The reduced tariff was achieved following talks between Prime Minister Keir Starmer and Chinese President Xi Jinping, which took place last week. Downing Street officials have highlighted the agreement as part of wider efforts to secure trade opportunities with major global partners and ensure British products face fewer barriers abroad.
Announcing the development, Prime Minister Starmer commented: 'We are bringing stability, clarity and a long-term strategy to how we engage with China, so we can bring home the benefits for businesses and for working people. Engaging with China is how we secure growth for British businesses, support good jobs at home, and protect our national security.'
Comments from UK government
In media appearances following the agreement, Kirsty McNeill credited UK officials for working to secure the deal, describing it as a substantial win for the Scotch whisky sector and the wider Scottish economy.
She also referenced the importance of exports to the industry's overall health, noting the government's commitment to driving similar achievements elsewhere.
Broader trade context and India deal
This trade breakthrough follows another key development in October, where India agreed to lower tariffs on Scotch whisky. The change in the Indian market is projected to result in as much as £1 billion in additional annual exports for UK producers.
The UK government reports that China remains the third largest trading partner for the United Kingdom overall and that exports to the country support approximately 370,000 jobs across the UK, further underlining the importance of mutually beneficial trade relations.
Final Summary
The agreement to halve tariffs on Scotch whisky entering China marks a major advance for the United Kingdom’s trade agenda and the Scottish distilling sector. With China named as both a fast-growing export market and a strategic trading partner, the government regards the tariff reduction as an important win for business stability and employment.
The industry has responded positively, anticipating improved competitiveness globally, especially following similar gains in India. Ongoing collaboration between trade officials and the Scotch Whisky Association is expected to ensure a smooth transition to the new tariff regime.
