A Whole Lot of Tariffs on Booze Just Ended
How the resolution of a 16-year trade dispute involving airline manufacturers helps the spirits industry
The seemingly never-ending cycle and continuation of tariffs — punitive measures by countries that often fall heavily on boozy imports and exports and yet have little or nothing to do with alcohol — may finally be coming to an end.
As reported by The Spirits Business, a 16-year trade war between the U.S. and European Union involving the airline manufacturers Airbus and Boeing that eventually included tariffs on single malt Scotch, Irish whiskey, vodka, rum and pretty much every other type of spirit has now hit a five-year pause. (You can read the backstory on those tariffs here.) A 25% EU tariff on U.S. rum, brandy and vodka has been suspended, as has a 25% U.S. tariff on liqueurs and cordials from Germany, Ireland, Italy and Spain, and Cognacs and other grape brandies from France and Germany.
As United States Trade Representative Ambassador Katherine Tai noted during a press call on Tuesday, “Today’s announcement resolves a longstanding trade irritant in the U.S.-Europe relationship. Instead of fighting with one of our closest allies, we are finally coming together against a common threat. ” (That threat would be China.)
“The five-year suspension of these tariffs on distilled spirits is happening at a critical time for the U.S. hospitality industry. We appreciate the Biden administration’s work to reset relationships with our trade allies,” says Chris Swonger, president and CEO of the Distilled Spirits Council.
However, Swonger notes that the new agreement does not include a suspension of a 25 percent tariff on American Whiskeys as part of a steel and aluminum trade dispute.
“American Whiskey exports to the EU, our largest export market, grew from $502 million in 2008 to $702 million in 2018, an increase of 40 percent,” he notes. “Since the tariffs were imposed, our American Whiskey exports to the EU have declined by 37 percent and to the UK by 53 percent.”
So while some of your favorite boozy imports may see a leveling off of price, American whiskey brands are still at a competitive disadvantage when exporting their bottles.
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