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Canada and Mexico revoke American whiskey tariffs

The US has come to an agreement with Canada and Mexico to repeal retaliatory tariffs on American whiskey exports to both countries.

Canada and Mexico have agreed to repeal retaliatory tariffs on American whiskey

Canada introduced a 10% tariff on American whiskey on 1 July 2018 in response to US president Donald Trump’s 10% and 25% import taxes on aluminium and steel respectively.

Meanwhile, Mexico slapped a 25% retaliatory tariff on American whiskey from 5 June 2018.

Chris Swonger, president and CEO of the Distilled Spirits Council, said: “With this critical issue now resolved, we look forward to joining the various efforts to support the prompt congressional passage of US-Mexico-Canada agreement, which includes important benefits for our industry.

“We are very encouraged by today’s news and we hope the US and our trading partners can build on this positive momentum to resolve all of the remaining retaliatory tariffs that our US distilled spirits exports face, particularly the European Union’s 25% tariff on American whiskey.”

The Distilled Spirits Council has voiced concerns over the retaliatory tariffs in the past, and said small distillers had been hit particularly hard by the tariffs.

A report released by the Distilled Spirits Council in March this year showed the “negative impact” the tariffs had on American whiskey exports.

The data showed that American whiskey exports dropped 8.2% between July and November 2018.

For the entire year, American whiskey exports were up 5.1% and reached a record US$1.18 billion. However, this was a “significant deceleration” from the 16% growth in 2017, the Distilled Spirits Council said.

Exports to the EU, where tariffs are still in place, grew 33% in the first half of 2018, but fell by 13.4% in the second half of the year after tariffs were introduced. American whiskey exports reached US$704 million in 2018, up from US$667m in 2017.

Earlier this year, Brown-Forman estimated that retaliatory tariffs could slice US$125m off its 2019 financial results.

China is also embroiled in a trade war with the US, dubbed the “largest trade war” in history. The country responded to president Trump’s additional US$34bn worth of tariffs on Chinese products with a 25% tariff on American whiskey, along vast quantities of other US-made goods.

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