US, EU and UK call for immediate removal of tariffs

13th January, 2021 by Melita Kiely

Trade associations from the US, EU and UK have lamented the introduction of additional US tariffs on Cognac and certain brandies, and are pleading for the immediate suspension of all tariffs on spirits and wine.

Scotch whisky ice

Trade bodies are once again uniting in calls for an end to punitive tariffs on spirits from the US, EU and UK

From Monday 12 January, certain Cognac and other grape brandies from France and Germany are now subject to a 25% tariff in the US. The move is part of an ongoing dispute between the US and the EU regarding plane manufacturers Airbus and Boeing.

A coalition of 21 trade bodies from the US, EU and UK said in a joint statement: “We are extremely disappointed with the imposition of additional excessive tariffs on certain Cognacs, other brandies and wines from France and Germany. These will just compound the harm caused by existing tariffs.

“The added pressure resulting from these tariffs will force more businesses to close their doors and more workers to be laid off in sectors already negatively impacted by the global pandemic.”

The US, EU and the UK have been embroiled in numerous trade spats since 2018. A 25% tariff on single malt Scotch, single malt Irish whiskey and liqueurs from the EU and the UK has been in place since October 2019.

The Scotch whisky industry said this has resulted in a 34% decline in Scotch exports to the US, while liqueur and cordial exports fell 28% from October 2019 and August 2020 compared to the previous 12 months.

The EU retaliated in November 2020 with a 25% tariff on imports of US rum, brandy, vodka and vermouth. Last month, the UK government said it would suspend the tariffs once the UK’s transition period, following its departure from the EU, had ended (31 December).

The Bureau National Interprofessionel de l’Armagnac (BNIA) slammed the introduction of tariffs on the category, arguing the move will ‘destroy’ the industry.

The coalition added: “The spirits and wine industries have been suffering since the imposition of retaliatory tariffs in 2018 related to disputes wholly unrelated to the drinks business.

“It is beyond time for these unwarranted and excessive tariffs to be suspended. We are strongly urging the US, EU and UK to return to the negotiating table without delay to reach an agreement to immediately suspend these tariffs.”

The coalition includes the Distilled Spirits Council of the US, Spirits Europe, the Scotch Whisky Association, American Craft Spirits Association, Kentucky Distillers’ Association, the Wine and Spirit Trade Association and American Beverage Licensees, to name a few.

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