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Growth of American whiskey exports slows amid trade row

Retaliatory tariffs are having a “significant and growing impact” on American whiskey exports and must be “rapidly addressed”, the Distilled Spirits Council has warned.

US spirits
American whiskey export figures have been hit by retaliatory tariffs

The trade body released a new report yesterday (21 March) showing full-year 2018 export data and the “negative impact” that retaliatory tariffs have had on American whiskey shipments during the period. The tariffs were enacted in response to US president Donald Trump’s 10% and 25% import taxes on aluminium and steel respectively.

Last month, the council reported that American whiskey exports had slumped by 8.2% between July and November last year as nations around the world hit back at the the US with their own tariff measures.

The new report covers data for the full 12-month period and shows that American whiskey exports increased by 5.1% in 2018 to a record US$1.18 billion. However, the Distilled Spirits Council said this was a “significant deceleration” from the 16% increase in 2017.

American whiskey exports to the EU grew by 33% in the first half of 2018, but fell by 13.4% in the second half of the year after tariffs were put in place. American whiskey exports to the EU hit US$704 million in 2018, up from US$667m last year.

Beyond whiskey

Total US spirits exports hit new highs of US$1.8bn last year, a 9.5% increase from US$1.64bn in 2017, but the rate of growth “significantly slowed” from the 14.9% growth recorded from 2016 to 2017.

For the first half of 2018, total US spirits exports grew by 26.1% to US$881m. But following the implementation of the retaliatory tariffs, exports during the second half of the year declined by 3% compared to 2017, to US$909m. In the fourth quarter of 2018, exports fell by 13.1% compared to the same period in 2017.

“With the full-year data in hand it is clear that the retaliatory tariffs are having a significant and growing impact on American whiskey exports, which had been a bright spot for US agriculture exports,” said Distilled Spirits Council president and CEO Chris Swonger.

“The damage to American whiskey exports is now accelerating, and this is collateral damage from ongoing global trade disputes.

“These numbers are worrisome – even if some portion of the front-end growth is attributable to larger producers positioning product in foreign markets ahead of the tariffs.”

The Distilled Spirits Council also reported that small distillers had been “particularly hit hard” by the tariffs and had reported lost orders and unreturned calls from local distributors “reluctant to commit to new orders given the uncertainty”.

Large distillers have also reported declining sales in some key export markets as a result of the tariffs, the council said.

Swonger added: “We urge policy makers and our trading partners to rapidly address these retaliatory tariffs before more damage is done to what has been a great American trade success story.”

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