EU’s 25% Bourbon tariff comes into force

22nd June, 2018 by Melita Kiely

The EU has today introduced retaliatory tariffs on €2.8 billion (US$3.3bn) worth of US products – including American whiskey – in response to president Donald Trump’s tax hikes on imported aluminium and steel.

whiskey whisky

Bourbon has been caught in the firing line of a trade war between the EU and the US

Effective from today (22 June), the tariffs on US goods include a 25% increase on American whiskey and Bourbon.

The move by the European Commission is in response to the Trump administration’s decision in March to introduce tariffs of 25% on steel and 10% on aluminium imported into the US. The duties were raised on 1 June, affecting the EU, Canada, Mexico and India.

The European Commission said its retaliatory tariffs are based on the value of its steel and aluminium exports affected by the US measures, which are worth €6.4bn.

The tax hikes from the EU will rebalance €2.8bn worth of exports immediately, while the remaining €3.6bn will be rebalanced in three years’ time or “after a positive finding in WTO dispute settlement if that should come sooner”.

The EU also stated that the rebalancing measures would be effective for as long as the US measures are in place, in line with the WTO Safeguards Agreement and EU legislation.

Cecilia Malmström, commissioner for trade, said: “We did not want to be in this position. However, the unilateral and unjustified decision of the US to impose steel and aluminium tariffs on the EU means that we are left with no other choice.

“The rules of international trade, which we have developed over the years hand in hand with our American partners, cannot be violated without a reaction from our side.

“Our response is measured, proportionate and fully in line with WTO [World Trade Organization] rules. Needless to say, if the US removes its tariffs, our measures will also be removed.”

Tension in China

China has also been embroiled in a trade war with the US, after Trump’s government announced additional tariffs of 25% on US$50bn worth of Chinese imports. Additional tariffs on US$34bn worth of Chinese imports are set to come into effect from 6 July.

In a retaliatory move, China responded with a 25% tariff on US imports including Bourbon, which will come into play on 6 July.

China is also planning to impose additional tariffs of 25% on chemical products, medical equipment and energy imported from the US, with a value equalling US$16bn. A date for implementation is yet to be confirmed.

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