U.S. and EU Tariffs Tug of War Looks to Be Coming to an End, Oct-Nov 2021

The end of a three-year long tariff nightmare for U.S. distillers is within site. Over the past 15 years, the Distilled Spirits Council of the United States – DISCUS has led an export promotion program in partnership with the U.S. Department of Agriculture to showcase American Whiskeys (i.e., Bourbon, Tennessee Whiskey, American Rye Whiskey and American Single Malt Whiskey) and other American spirits in key export markets.

Total U.S. spirits exports have increased by nearly 66 percent, from $831 million in 2006 to $1.38 billion in 2020. Since tariffs were imposed in 2018 those sales of American Whiskeys have plummeted.

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“Since the imposition of the EU tariffs, American Whiskey exports to the EU, the U.S. spirits industry’s largest export market, have plunged 37 percent, from $702 million to $440 million (2018-2020). We have a long way to go, but are fully committed to building back American Whiskeys better in the EU.

“After three very difficult years of sagging American Whiskey exports, the EU and U.S. are back to a zero-for-zero tariff agreement on distilled spirits, which has been instrumental to our export success and job creation on both sides of the Atlantic since 1997,” said DISCUS President & CEO Chris Swonger.

“Lifting this tariff burden on American Whiskeys not only boosts U.S. distillers and farmers, it also supports the recovery of EU restaurants, bars and distilleries hit hard by the pandemic. 

“Cheers to the Biden administration for their dogged determination to reset trade relations with the EU and bring a stop to the needless damage being done to U.S. businesses caught up in this trade war. The end of this long tariff nightmare is in sight for U.S. distillers, who have struggled with the weight of the tariffs and the pandemic. It’s time for the UK to lift its tariff on American Whiskeys so we can all get back to toasts, not tariffs.” 

U.S. officials advised DISCUS that the EU’s retaliatory tariffs are suspended with no end date because the U.S. Section 232 tariffs on steel and aluminum imports from the EU are not permanently removed. Additional details will be forthcoming, as President Biden and EU President Ursula von der Leyen are expected to announce the agreement tomorrow.

While the UK’s 25% tariff on American Whiskeys continues to apply, we anticipate that the UK and US will move swiftly to reach a similar agreement.  We will keep you posted on additional developments.

Tariffs Have Slashed Kentucky Bourbon Exports by a Whopping 50%

Kentucky Bourbon exports had enjoyed double-digit growth for a decade before the tariffs were imposed in 2018.

Kentucky Distillers’ Association President Eric Gregory added, “These unfortunate tariffs have slashed exports of Kentucky Bourbon by 50% to the E.U. and the United Kingdom, costing distillers, industry partners and farm families hundreds of millions of dollars.

The KDA thanks the steadfast leadership of the Biden Administration, Kentucky Gov. Andy Beshear, Congressman John Yarmuth and officials in Europe for their tireless efforts to resolve this ongoing trade dispute and to restore fairness in overseas markets for Kentucky’s signature distilled spirits industry.

With the suspension of the E.U. tariffs, we urge leaders from both the U.S. and U.K. to resolve their own tariff dispute so our legendary distillers can return at long last to doing what they do best – crafting the finest Bourbon for all the world to enjoy.

The Toasts Not Tariffs Coalition is made up of 50 Associations Had This to Say

The Toasts Not Tariffs Coalition statement said, “The EU is a critical export market for American Whiskey producers. We commend the Biden administration for restoring the important trading partnership with the EU. The lifting of the tariff on American Whiskeys marks the final chapter in the tit-for-tat retaliatory tariffs on EU and U.S. distilled spirits and wines products that have been ensnarled in two trade disputes totally unrelated to the beverage alcohol sector.

“Returning to duty-free trade for all distilled spirits also brings much-needed certainty to hospitality businesses on both sides of the Atlantic, many of which continue to be negatively impacted by the pandemic.

“It’s time for the UK to lift its tariff on American Whiskeys and eliminate the threat of additional tariffs on American wine so we can all get back to toasts, not tariffs.” A full list of Toasts Not Tariffs Coalition members is included below.

Brown-Forman Comments on the End of These Tariffs

“Brown-Forman applauds the Biden Administration for today’s announcement between the U.S. and the EU regarding steel and aluminum tariffs,” said Brown-Forman Corporation’s President and Chief Executive Lawson Whiting. “This agreement delivers on the Administration’s promise to rebuild the Transatlantic alliance by removing  tariffs on American whiskey and other U.S. exports, which have been in place now for more than three years.

“We would like to thank Commerce Secretary Gina Raimondo, Ambassador Katherine Tai, their counterparts in the EU, and lawmakers on both sides of the aisle for their efforts in helping reach this positive resolution.

“Brown-Forman looks forward to the return of a level playing field on January 1, 2022, and continued international growth for American Whiskey. We hope a similar outcome can soon be achieved between the U.S. and the UK.”

Toasts Not Tariffs Coalition

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

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