American whiskey tariffs: is relief in sight?

After a tumultuous year that saw distillers’ revenues plummet during the Covid‐19 pandemic, the American whiskey sector was given a breather when the European Union (EU) and the US came to an agreement over the incoming 50% tariff. On 17 May, just several weeks before an increased tariff was due to come into effect, representatives from both blocs said they had started talks to address the trade conflicts over the global steel and aluminium industry.

As part of these discussions, they agreed to halt the 50% tariff on American whiskey that would have come into effect on 1 June 2021. The move would have doubled the current rate on US whiskey. In 2018, former US president Donald Trump imposed a 25% tariff on steel and aluminium from the EU. The EU implemented a 25% tariff on American whiskey and other goods in retaliation.

Both the EU and the US are committed to resolving their trade issues “before the end of the year”, a joint statement from the two nations said. Chris Swonger, president and CEO of the Distilled Spirits Council of the US (Discus), said the 50% tariff “would have forced many craft distillers out of the EU market”.

He continued: “We recognise there is still work to be done to get EU and US spirits back to zero‐for‐zero tariffs. We greatly appreciate the Biden administration’s ongoing efforts to resolve these longstanding trade disputes and reduce the economic pain felt by those industries unfairly caught in the middle.”

Jack Daniel’s owner Brown‐Forman said it was hopeful that negotiations would lead to the total removal of tariffs on American whiskeys. Eric Gregory, president of the Kentucky Distillers’ Association, also applauded the move. “This is welcome news as distillers in Kentucky and across America were perilously close to a crippling blow on European exports,” he said. “This gives both sides some breathing room to return to free and fair trade, and once again level the playing field for Kentucky’s signature spirit.”

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