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Coalition fears return of US whiskey tariffs
Toasts Not Tariffs has urged the US government to secure an agreement with the EU to avoid the return of retaliatory tariffs on American whiskey, which would be 50% in 2024.
Toasts and Tariffs comprises 50 associations representing the three-tier chain of the US alcohol industry.
The US had duty-free access to the EU between 1997-2018. In 2018, former US president Donald Trump imposed a 25% tariff on steel and 10% on aluminium from the EU.
The EU implemented a 25% tariff on American whiskey and other goods in retaliation, amounting to €2.8 billion (US$3.3bn) worth of products.
Between 2018 to 2021, American whiskey exports to the EU “plunged by an astonishing 20%” from US$552 million to US$440m, which had a “devastating impact on distilleries” across the US, said Toast Not Tariffs in a letter to on US trade representative ambassador Katherine Tai and US secretary of commerce Gina Raimondo on 19 July this year.
Tariffs on American whiskey were suspended in October 2021 for two years.
As the suspension nears an end, the coalition has written to Tai and Raimondo urging the Biden administration to secure an agreement with the EU that avoids the return of retaliatory tariffs on American whiskeys.
Tai met EU officials in Brussels yesterday (20 July) and will meet them again today (21 July) to discuss establishing a global arrangement on sustainable steel and aluminium.
Since the EU suspended its 25% retaliatory tariff on American whiskeys in January 2022, American whiskey exports to the EU have increased by 32% compared with 2021, reaching US$566m.
The coalition’s letter said agreements “to suspend tariffs were significant steps in the right direction to rebuild the US-EU trading relationship and have helped American whiskey exporters located in 41 states begin to regain lost market share”.
If the retaliatory tariffs were to be reimposed, it would be at a rate of 50% effective from January 2024, the coalition highlighted.
If this were the case, growth of American whiskey would come “to a screeching halt” and put its exporters at a “competitive disadvantage in [the US’] single largest export market”, the letter warned.
“We very much appreciate your leadership and president Biden’s commitment to strengthen the relationship with the EU,” the letter continued.
“We urge you to continue this positive momentum and secure an agreement with the EU that avoids the return of retaliatory tariffs on American whiskeys in January 2024.”