American whiskey makers, facing a market-killing 50% European Union tariff, were poured a temporary reprieve Monday when trade negotiators shelved the increased tax to bring some calm to talks over steel imports.
The United States and EU said the planned tariff increase from 25% to 50% will be iced during the new talks. The new talks also suspend other tariff increases on U.S. products, including motorcycles made by Harley-Davidson.
“This news couldn’t come soon enough,” said Chris Swonger, president and CEO of the Distilled Spirits Council, the industry lobbying group. “Distillers across the United States are breathing a huge sigh of relief after bracing for a 50% tariff on American whiskeys in just a matter of days that would have forced many craft distillers out of the EU market,” he added.
In a recent Secrets story, several craft distillers said that they have remained in European and British markets despite the tariffs, with many covering the tax in order to keep their products affordable.
But at 50%, most said they would pull out of those markets. “We’re just doing the best we can to hang on here and get through the worst of it,” said Michael Langan, who heads Yellow Rose Distilling of Houston, Texas.
The tariffs in the EU and United Kingdom were retaliation for Trump administration tariffs on steel, aluminum, and Boeing-Airbus subsidies. In a bid to get Trump to back down, the EU announced a retaliatory 25% tariff on American whiskey, and hopeful Trump allies and Kentucky Sens. Mitch McConnell and Rand Paul would get involved. But it didn’t work.
Now, said Swonger, there is hope that talks could get back to the pre-2018 days of no whiskey tariffs on either side of the Atlantic Ocean.
“We recognize there is still work to be done to get EU and U.S. spirits back to zero for zero tariffs. We greatly appreciate the Biden administration’s ongoing efforts to resolve these long-standing trade disputes and reduce the economic pain felt by those industries unfairly caught in the middle,” he said.
