KDA urges tariff removal for US whiskey

5th March, 2021 by Nicola Carruthers

The Kentucky Distillers’ Association is calling for the immediate suspension of tariffs on American whiskey, which caused Bourbon exports to the EU to plummet by nearly 50% in 2020.

Bourbon

Bourbon exports to the UK dropped 50% in 2020

Trade group the Kentucky Distillers’ Association (KDA) reiterated its call for tariff suspension following yesterday’s (4 March) announcement that the US has removed tariffs on single malt Scotch for four months. The tariffs on Scotch whisky were introduced in October 2019 due to an ongoing dispute between the US and the EU regarding plane manufacturers Airbus and Boeing.

KDA president Eric Gregory said: “This is a good first step and a hopeful signal that the administration is committed to resolving trade wars that have inflicted so much collateral damage on global markets, including Kentucky’s signature Bourbon industry and our broader American whiskey family.”

In 2018, the US imposed a 25% tariff on steel and aluminium from the EU. The EU implemented a 25% tariff on American whiskey and other goods in retaliation.

Gregory added: “We strongly believe this dispute deserves similar priority in finding a resolution before more long-term damage is done.

“With a focused settlement to help the aerospace industry now underway, the KDA reiterates its call for an immediate suspension of disastrous tariffs in the steel and aluminium dispute that have ensnared unrelated American whiskey and key agricultural exports.”

Tariffs curbed American whiskey exports by 53% to the UK and 38% to the EU since they were imposed in 2018, the Distilled Spirits Council of the US (Discus) said. In June 2021, EU tariffs on American whiskey are due to rise by 50%.

Last week, the KDA revealed that US tariffs caused exports of Kentucky Bourbon to nose dive by 35% in 2020 to US$319 million, with shipments to the EU falling by 48% to US$135m.

As the largest market within the EU for whiskey, the UK saw sales drop 50% from US$67m in 2018 to just US$33m last year. The largest EU export country is now Spain at US$49m, the KDA said.

Gregory said the KDA is looking forward to a “return to an open trade with all industries involved” during a challenging time for the sector.

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