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US considers tariffs on vodka and gin

The US is considering additional tariffs on imported spirits – including gin and vodka from the UK, Germany, France and Spain – due to an ongoing aircraft subsidies dispute with the EU.

American whiskey
The USTR is holding a public consultation to decide whether to impose additional tariffs on EU spirits

The US introduced a 25% tariff on single malt Scotch, single malt Irish whiskey and liqueurs from the EU last October.

The tariffs were put in place due to a dispute between the EU and US over subsidies for plane manufacturer Airbus, which the US claims caused the Boeing 777, 787 and 747 aircrafts to lose sales and market share, affecting revenue for US producers and jobs for US workers.

Now, the US Trade Representative (USTR) is conducting a review of the action being taken by the World Trade Organization (WTO) regarding the dispute.

As part of this, the USTR is considering whether it should introduce additional tariffs on EU spirits, including Scotch whisky, Irish whiskey, other whiskeys and grape brandies from all EU members.

The Distilled Spirits Council of the US (Discus) said the industry “strongly opposes” any extra tariffs, which would “only escalate trade tensions” and have further negative effects on American companies and hospitality jobs that are already suffering due to the Covid-19 pandemic.

Earlier this week, new data from Discus showed a 25% tariff imposed by the EU on American whiskey in retaliation to US tariffs on steel and aluminium from the EU has caused a 33% drop in American whiskey exports to the EU in two years, valued at around US$300 million.

The USTR is seeking public opinion on whether the new tariffs should be introduced.

In a statement, Discus said: “The longer these disputes go unresolved, the greater the threat of even more tariffs on our industry. The EU has stated it may impose retaliatory tariffs this spring on US rum, vodka and brandy in its parallel case at the WTO concerning Boeing.

“In addition, the EU is scheduled to increase its retaliatory tariff on American whiskey to 50% in spring 2021.

“We urge the administration and our EU trading partners to de-escalate this trade dispute by simultaneously removing the US tariffs on EU beverage alcohol products and the EU’s tariff on American whiskey.”

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