EU rolls back tariffs on US whiskey – will UK follow suit?
The EU has agreed to set aside hefty trade tariffs on American whisky and bourbon. US whiskey producers are now calling on the UK to follow suit.
In June 2018, former President Trump placed tariffs on EU-made steel and aluminium, the 25% tariffs on imports of American whiskey and bourbon into the EU followed. Tariffs were set to increase to 50% this year, but a temporary suspension until 1st December has given the two sides time to reach a solution.
Hefty tariffs knocked American whiskey and bourbon exports to the EU, its largest export market for spirits, between 2018-2020: exports decreased by 37%, from $702 million to $440 million.
Brown Forman was particularly affected due to the strength of its Jack Daniels brand in the EU. In June, Brown Forman’s president revealed to investors that the tariff on American whiskies cost the company a loss of approximately $70 million a year.
Distilled Spirits Council Vice President for International Trade Robert Maron has recently said that the tariffs had “seriously impeded the export progress that has benefited our sector and created jobs across the country”, and the impact of Covid-19 furthered the negative effect on exports of American distilled spirits.
US and EU parties agreed on the deal at the G20 Heads of State and Government Summit held in Rome at the end of October.
Chris Swonger, the president and CEO of Discus, said lifting the tariff burden on US whiskey would boost US farmers and distillers, alongside supporting the recovery of EU bars, restaurants and distillers after the pandemic’s adverse effects on business.
Swonger praised the Biden Administration for its “dogged determination to reset trade relations with the EU”.
He said, “With the removal of these EU tariffs, we are energized and ready to ramp up our American Whiskey promotions in the EU to re-introduce America’s native spirits to EU consumers and resume a great American export success story.”
“We have a long way to go, but are fully committed to building back American whiskeys better in the EU”
Welcoming the announcement, The Bourbon Alliance congratulated colleagues in both the US and EU for their perseverance in removing the tariffs.
It said the tariff rollback would enable venues in the EU to completely restock their bars for the first time since the beginnings of the dispute in 2018 – however, UK tariffs on US-made whiskey are still in place, and they are calling on the UK to remove them.
Co-founder of the Bourbon Alliance, Matha Dalton, said the UK government needed to think about pioneering a similar agreement.
She said, “When the UK left the Customs Union, we were promised the freedom to establish an independent trade policy – the time has come to realise the opportunities of Brexit and to cut the tariff for good,”
The measures still “inflict pain” on the hospitality sector, UK importers, and the Scotch whisky supply chain.
With the UL, the US whiskey market’s fourth-largest market, the fall in US whisky imports to the UL by 53% since 2018 from $150 million to $71 million is having “a horrific effect on the industry and preventing inward investment.
She called for a resolution, adding that “a tariff on Bourbon and other US whiskeys is not in the UK’s national interest and damages the UK economy.”