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Tariffs could affect 46% of US spirits exports
Around 46% of US spirits exports could soon be facing retaliatory tariffs in response to Donald Trump’s decision to impose duties on aluminium and steel, the Distilled Spirits Council has warned.
If imposed, tariffs “would severely harm” US spirits producers
The White House brought in the tariffs on 1 June – steel faces a 25% import duty, while imported aluminium will be taxed at 10%. President Trump said the move was in the interest of national security, but nations around the world accused the US of protectionism.
On Wednesday (6 June), the European Commission confirmed it would introduce tariffs on about €2.8 billion (£2.5bn) worth of US goods ranging from Bourbon to motorbikes. The 25% tariff on American whiskey could be imposed as early as 20 July.
On Tuesday (5 June) Mexico imposed a 25% tariff on Bourbon, while Canada has proposed a retaliatory tariff of 10%, which may be imposed on 1 July.
Turkey has proposed a 40% tariff on all US distilled spirits, which is set to come into force on 21 June.
China has already announced plans to slap a 25% tariff on US whiskey in response to punitive US measures.
In a letter to commerce secretary Wilbur Ross, the Distilled Spirits Council said it is “extremely concerned about the increasing likelihood” that the EU, Canada, Turkey and China will go through with previously stated trade threats.
The group said that US spirits exports are worth an estimated US$759m to these markets. If imposed, tariffs “would severely harm” producers, farmers, distribution, logistic providers and packaging suppliers.
In addition, Distilled Spirits Council said that around 65% of global US whiskey exports are also at risk of retaliatory tariffs.
US spirits exports have grown from US$575m in 1997 to US$1.65 billion in 2017 – an increase of 185%. American whiskey is “a key component of this export success”, having increased from US$290m to US$1.13bn during the same period.
Retaliatory tariffs could “seriously impede the export process that has benefited our sector”, the Distilled Spirits Council said.