The U.S. alcohol industry is caught in a tariff dispute that is not of their making. These retaliatory tariffs were imposed in mid-2018. 10 years prior to the tariffs total U.S. spirits exports grew by 27%. Then the tariffs went into effect.
In June 2018 the EU imposed a 25% retaliatory tariff on American Whiskey. From 2018 to 2020 total U.S. spirits exports were down 23% to $1.4 billion. American Whiskey exports were down 29% to $846 million during the same period.
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EU Tariffs Set to Double from 25% to 50% on June 1, 2020
The Toasts Not Tariffs Coalition, 48 associations representing the entire three-tier chain of the U.S. alcohol industry, sent a letter today to U.S. Trade Representative Ambassador Tai, U.S. Department of Agriculture Secretary Vilsack and U.S. Department of Commerce Secretary Raimondo urging the immediate removal of all U.S., EU and UK tariffs on distilled spirits and wines imposed in connection to unrelated trade disputes.
The groups stated, “In exactly 50 days, the EU’s tariff is scheduled to double to 50 percent, further exacerbating the unlevel playing field in the EU market for American Whiskeys. Moreover, we are gravely concerned that if urgent action is not taken to lift these tariffs, many small U.S. distilleries will not be able to recover from the devastating impacts of both the tariffs and the pandemic.”
The coalition stated recent agreements between the U.S., EU and UK to suspend tariffs on certain wines and spirits are significant steps in the right direction that will support the recovery of U.S. distilleries, restaurants, and bars that were forced to close during the pandemic. They underscored, however, that American Whiskey, the U.S.’s top spirit export, must not be left behind saddled by tariffs.
“The EU and UK continue to impose a 25 percent tariff on American Whiskeys, including Bourbon, Tennessee Whiskey, American Rye Whiskey and American Single Malt Whiskey, which puts these products at a competitive disadvantage in those markets,” said the coalition. “The devastating impact of these tariffs on American whiskey in our most important export markets is clear; since these tariffs were imposed in June 2018, American Whiskey exports have declined by 37 percent to the EU and by 53 percent to the UK.”
They concluded, “On behalf of producers, importers, wholesalers and retailers that comprise the U.S. hospitality sector, we commend the Biden Administration for working to reestablish positive relationships with the EU and UK. We urge you to continue this positive momentum by prioritizing the permanent removal of EU, UK, and U.S. tariffs on distilled spirits and wine, which will help support U.S. jobs and businesses as the economy continues to recover.”
Toasts Not Tariffs Coalition Webinar
Toasts Not Tariffs Coalition hosted a webinar today on the tariffs’ impact on the hospitality industry, which included opening remarks by members of the Bourbon Coalition including Reps. John Yarmuth (D-KY) and Andy Barr (R-KY).
The Toasts Not Tariffs Coalition group is made up of the following organizations.
American Beverage Licensees
American Craft Spirits Association
American Distilled Spirits Alliance
American Distilling Institute
American Single Malt Whiskey Commission
Arizona Craft Distillers Guild
Atlantic Seaboard Wine Association
California Artisanal Distillers Guild
Colorado Distillers Guild
Connecticut Spirits Trail
Distilled Spirits Council of the United States
Florida Craft Spirits Association
Idaho Distillers Association
Illinois Craft Distillers Association
Independent Restaurant Coalition
Iowa Distillers Alliance
Kentucky Distillers’ Association
Louisiana Distillers Guild
Maryland Distillers Guild
Michigan Craft Distillers Association
Montana Distillers Guild
Napa Valley Vintners
North American Shippers Association
National Association Of Beverage Importers
National Association of Wine Retailers
National Council of Chain Restaurants
National Restaurant Association
National Retail Federation
New Jersey Craft Distillers Guild
New York State Distillers Guild
NY Wine Industry Association
Ohio Distiller’s Guild
Oregon Distillers Guild
Oregon Wine Council
Pennsylvania Distillers Guild
South Carolina Craft Distillers Guild
Tennessee Distillers Guild
Texas Distilled Spirits Association
The Maryland Wineries Association
U.S. Wine Trade Alliance
Virginia Distillers Association
Washington Wine Institute
Willamette Valley Wineries Association
Wine And Spirits Shippers Association
Wine Institute, Wine & Spirits Wholesalers of America