Tariffs cause 41% fall in American whiskey exports

8th October, 2020 by Nicola Carruthers

After American whiskey exports to the EU fell by 41%, 18 trade groups wrote a joint letter calling for the urgent removal of tariffs on spirits.

Trade bodies on both sides of the Atlantic are calling for the urgent removal of tariffs

According to new research released by the Distilled Spirits Council of the US (Discus), American whiskey exports to the EU – the US spirits industry’s largest export market – dropped from US$757 million to US$449m between August 2019 and July 2020.

In October 2019, the US imposed a 25% tariff on imports of single malt Scotch whisky, single malt Irish whiskey from Northern Ireland, liqueurs and cordials from Germany, Ireland, Italy, Spain and the UK, and certain wines from France, Germany, Spain and UK.

The latest data shows that US imports of Scotch whisky fell by nearly 35% between October 2019 and July 2020 (US$852m) compared to the period between October 2018 and July 2019 (US$1.31 billion).

Meanwhile, US imports of liqueurs and cordials from Germany, Ireland, Italy, Spain and the United Kingdom fell by 26% to US$331m in the same period.

As such, Discus and 17 other trade associations across the alcohol sector have sent a letter to the US Trade Representative (USTR) and the European Commission to state their mutual opposition to the tariffs and ask for them to be removed immediately.

The joint letter has been sent in response to reports in the news that the World Trade Organization has authorised the EU to impose US$4bn in tariffs on US imports as part of the Boeing aircraft dispute.

In the letter, the trade bodies voiced their concern that the ruling could trigger the EU to enact further tariffs on US alcohol. The EU previously indicated that it may impose tariffs on rum, brandy, vodka and wine.

The groups called for the EU and US to immediately agree to refrain from executing any new tariffs and suspend all additional tariffs while negotiations are underway.

‘Severe economic pain’

“The escalation of tariffs on the distilled spirits and wine sectors, by either the US or EU, will only increase harm to an industry already suffering,” the trade groups said in the letter.

“The spirits and wine industries and hospitality sector are facing incredible economic harm due to the mandatory closings of restaurants, bars and distillery and winery tasting rooms in response to the outbreak of Covid-19.

“These tariffs, which have been imposed in connection with unrelated trade disputes, have generated severe economic pain for our sectors and our wider supply chains.”

The trade associations also noted the “damaging ripple effect” across the alcohol supply chain from distillery workers, hospitality staff, retail, and farmers to packaging companies and logistic providers.

The joint letter was signed by 18 trade groups including Discus, Spirits Europe, Scotch Whisky Association, American Craft Spirits Association, American Distilled Spirits Alliance, Kentucky Distillers’ Association, and Wine & Spirits Wholesalers of America.

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