The war of words on tariffs is heating up and U.S. distilled spirits is directly in the cross-hairs. Mexico has already pulled the trigger and imposed a retaliatory 25% tariff on U.S. whiskeys on June 5, 2018. At least four others have proposed additional tariffs of between 10% to 40%.
In a letter today presented to Commerce Secretary Wilbur Ross, the Distilled Spirits Council said it is “extremely concerned” about the increasing likelihood that the European Union (EU) and other countries will begin retaliating against U.S. spirits products in response to the U.S. decision to impose tariffs on steel and aluminum, and “the impact that retaliatory tariffs will have on U.S. distilled spirits producers, as well as their agricultural and supply chain partners.”
The letter points out that exports worth approximately $759 million, representing 46 percent of global U.S. spirits exports and 65 percent of global U.S. whiskey exports, are the target of retaliatory tariffs.
Such tariffs “would severely harm producers, U.S. farmers …, distribution and logistics providers, as well as other input providers such as glass and other packaging suppliers,” the letter stated, noting that the spirits sector directly and indirectly employs approximately 1.5 million people.
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U.S. Global Exports of Spirits has Grown 185% Over Last 20 Years
“Global exports of U.S. spirits … have benefited significantly from the United States’ efforts to secure market opening trade agreements. Over the past two decades, U.S. spirits exports have increased from $575 million in 1997 to $1.64 billion in 2017, a rise of 185 percent.” U.S. distilled spirits are now exported from small, medium and large distillers located across 42 states, the Council noted.
“However, the imposition of tariffs on these products by our major trading partners threatens to seriously impede the export progress that has benefited our sector and created jobs across the country,” the Council warned.
The letter was hand delivered to Secretary Ross this morning. The full letter is below.