The Price of Your Favorite Scotch Is About to Go Up. Blame the Trade War.

A dispute over subsidized aircrafts means your liquor bill might increase

Scotch
(Photo by Andrew Seaman on Unsplash)
By Kirk Miller / July 2, 2019 12:21 pm

Who loses in a trade war?

Whisky drinkers.

According to trade publication The Spirits Business, the Office of the U.S. Trade Representative recently issued a public comment regarding additional European Union products that could be subject to tariffs — an apparent retaliation against the EU providing civil aircraft subsidies and part of a longer, larger dispute at the World Trade Organization that goes back 15 years.

Those products that could face a steep price increase? Irish whiskey and Scotch, which could face up to $4 billion in new tariffs.

“Exports of Scotch whisky to the U.S. have been zero tariff for 20 years, so it is disappointing that Scotch whisky has been drawn into this dispute,” a spokesperson for the Scotch Whisky Association told the BBC. The Distilled Spirits Council of the United States also denounced the potential tariffs, with DSC spokesperson Lisa Hawkins telling the BBC, “U.S. companies — from farmers to suppliers to retailers — are already being negatively impacted by the imposition of retaliatory tariffs by key trading partners on certain U.S. distilled spirits. These additional tariffs will only inflict further harm.”

Translation: This hurts everyone, including all countries involved along with farmers, consumers (who will pay more) and suppliers. As the Scotch Whisky Association noted, the Scotch industry generates $88 million of business for the U.S. alone by just using U.S. bourbon casks for maturation. Scotch also makes up 12% of the total whiskey market in the U.S.

These tariffs follow an on-going trade war between the U.S. and the E.U. that saw the European Union tack on a 25% bourbon and American whiskey tax last June. Separately, Canada added a 10% tariff on American whiskey, and China and Mexico have added 25% tariffs to American whiskey, although Canada and Mexico have since revoked those increases.

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