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American whiskey fears 50% EU tariffs from January

Distillers are urging the permanent removal of ‘debilitating’ EU tariffs on American whiskey, which are due to be reintroduced and doubled to 50% in January.

american-whiskey
Whiskey producers could face 50% tariffs in the EU from January 2024

At the US-EU Presidential Summit on 20 October in Washington DC, an agreement was not reached between US president Biden and European Commission president von der Leyen to permanently remove or extend the suspension of the EU’s retaliatory tariffs on American whiskey.

From 1 January 2024, the tariffs are due to come back into effect at the higher rate of 50%.

A statement by Chris Swonger, president and CEO of the Distilled Spirits Council of the US (Discus), said: “American whiskey distillers were holding out hope that this summit would result in an agreement that ensured the tariffs on American whiskeys would not return in the new year.

“Without this agreement, American whiskey distillers are facing the serious threat of the reimposition and doubling of the EU tariff to 50% beginning on 1 January 2024.

“Since the EU suspended its 25% retaliatory tariff on American whiskeys in January 2022, American whiskey exports to the EU have bounced back and surpassed pre-tariff levels.

“The US distilled spirits industry has worked hard to regain its footing in the EU market and a return of the tariffs would bring this positive momentum to a screeching halt.

“We urge the Biden administration to continue to prioritise the permanent removal of these debilitating tariffs. Until the threat of tariffs returning is fully removed, the uncertainty will continue to restrict our growth in our most important international market.”

The US and EU have had a long-running dispute regarding tariffs. In June 2018, the EU imposed a 25% retaliatory tariff on American whiskeys in response to the US implementing tariffs on steel and aluminium.

The tariffs on American whiskey caused a 20% reduction in exports to the EU – the largest export market for the category. In value terms, this resulted in a decline from US$552 million to US$440m between 2018 and 2021.

When the suspension came into place, American whiskey exports to the EU rose by 29% in 2022 compared with 2021, hitting US$556m in 2022.

The 2022 exports accounted for 44% of all American whiskey exports, surpassing the pre-tariff level of US$518m in 2017. Exports to the EU from January to July 2023 were by almost 91% compared with the same period the year prior.

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