American whiskey celebrates end of tariffs

The US and the UK have agreed to remove punitive tariffs on American whiskey after resolving the steel-aluminium dispute.

By Melita Kiely

On Tuesday 22 March, US secretary of commerce Gina M Raimondo and US trade representative Katherine C Tai announced a new tariff agreement with the UK.

The agreement will allow UK steel and aluminium products to enter the US without tariffs.

Tariffs had been imposed on both metals under former US president Donald Trump. This pushed the UK and the EU to inflict more than US$500 million worth of tariffs on US goods, including American whiskey.

From 1 June 2022, American whiskey will once again benefit from tariff-free trade between the US and the UK. The news follows the removal of EU tariffs on American whiskey, which were abolished on 1 January 2022.

Raimondo said: “Since taking office, president Biden has made it a top priority to rebuild our relationships with our allies and partners around the world as we work to counter China’s unfair trade practices and ensure that America is able to compete globally in the 21st century.

“By allowing for a flow of duty-free steel and aluminium from the UK, we further ease the gap between supply and demand for these produces in the United States. And by removing the UK’s retaliatory tariffs, we reopen the British market to beloved American products.”

Trade bodies and distillers on both sides of the Atlantic have long campaigned to end the tariffs, which have caused significant drops in sales.

Discus welcomes end of ‘nightmare’

The Distilled Spirits Council of the US (Discus) said it was pleased to see the end of the “long tariff nightmare”.

Chris Swonger, Discus president and CEO, said: “With the removal of the UK’s debilitating retaliatory tariffs on American whiskey exports, US distillers are ready to fire up the stills and resume sharing the special taste, heritage and quality of America’s native spirit with our UK consumers.

“From day one, the Biden administration made it a priority to reset the relationship with the EU and UK, two of our most important allies and trading partners. The successful resolution of two separate and complicated trade disputes that saddled distilled spirits on both sides of the Atlantic with tariffs could not have been possible without the strong leadership of secretary Raimondo, ambassador Tai and their teams at the Departments of Commerce and Office of the United States Trade Representative.

“We also appreciate the longstanding support from the US Department of Agriculture and secretary [Thomas J] Vilsack for highlighting the negative impact retaliatory tariffs have on value-added agriculture exports, including distilled spirits. American whiskey producers have a close relationship with their farmer partners who are also hailing an end to these devastating tariffs.”

Brown-Forman commends tariff agreement

Jack Daniel’s producer Brown-Forman has also expressed its relief at the elimination of American whiskey tariffs. Previously, CEO Lawson Whiting said the firm was the most affected company because of its American whiskey portfolio.

Tariffs caused Kentucky Bourbon exports to the EU to fall by almost 50% in 2020, while shipments to the UK, formerly Kentucky’s largest EU market, plummeted by 50%.

From 2018 and 2020, total American whiskey exports fell by 29%, with sales to the EU down by 37% and sales to the UK decreasing by 53%.

Brown-Forman said in a statement: “Brown-Forman commends the Biden administration for today’s tariff agreement with the United Kingdom.

“As the leading producer of American whiskey, Brown-Forman appreciates the administration’s unwavering commitment to rebuilding the Transatlantic alliance.

“The removal of tariffs on American whiskey and other US exports creates more opportunities for the continued international growth of our American-made products.”