Marketing

99% of Irish whiskey’s US exports tariff-free

Dismay on both sides of the Atlantic greeted the recent US decision to maintain the 25% tariff regime on a range of drink products from the EU including Single Malt Scotch Whisky, Single Malt Irish Whiskey from Northern Ireland and liqueurs and cordials from Germany, Ireland, Italy, Spain and the UK.

 

The EU’s tariff on American Whiskey, now in place for over two years, is causing severe damage to US exports and negatively impacting jobs in the US.

The EU’s tariff on American Whiskey, now in place for over two years, is causing severe damage to US exports and negatively impacting jobs in the US.

But the US Trade Representative organisation also decided not to introduce any further hikes or include any additional products under the tariff regime.

“The United States is the largest market for Irish whiskey exports,” pointed out Drinks Ireland|Whiskey Head William Lavelle, “Over 99% of Irish whiskey exports to the US remain tariff-free.

“But we’re disappointed that a small number of Northern Irish Single Malts continue to be subject to tariffs,” he commented to Drinks Industry Ireland, in welcoming the recent statement from the US Trade Representative that the US will begin a new process with the EU in an effort to reach an agreement on aviation issues.

“We’re calling on the US and EU to take this opportunity to intensify negotiations to seek a resolution of their various trade disputes with a view to ending all tariffs on trans-Atlantic trade in whiskey and spirits.”

Drinks Ireland Director Patricia Callan commented, “We’re disappointed that Irish cream and other liqueurs (from Ireland and Northern Ireland) have had existing tariffs retained in their largest market, the United States.  There’s no justification for these tariffs and we remain particularly disappointed that spirits categories are subject to a trade dispute about unrelated sectors, in this case aircraft.

“In 2018 (year for which we have the most recent data), 78.5 million bottles of both Irish whiskey and Irish cream liqueur were sold in the US.  These sales help support thousands of jobs in Ireland, north and south, including in the agricultural sector which supplies Irish barley and cream for these products.

“It is not just jobs in Ireland that are threatened by these tariffs. Revised figures produced by the consulting firm John Dunham Associates earlier this year suggested that the tariffs on liqueurs and cordials alone would lead to a total of 14,230 lost jobs and $582.7 million in lost wages. On top of this, the cost to the American economy could be nearly $2,040.6 million in economic activity. Simply put, these are US tariffs that are costing US citizens their jobs.

“It’s worth noting that former USTR Robert Zoellick, who filed the initial US complaint against European support for Airbus more than 15 years ago, has said that the US and Boeing’s intent all those years ago was to seek a negotiated solution with the EU. The decision not to add new tariffs can be seen as a decision not to escalate an already difficult situation and we continue to call on the EU Commission and US administration to take advantage of this and to seek a negotiated solution to ongoing trade disputes with a view to ending all recently-imposed tariffs on both sides of the Atlantic.”

In the US, the Distilled Spirits Council of the United States pointed out that, “Restaurants and bars on both sides of the Atlantic have been pummelled by the impact of Covid-19. Governments should be aiding in the recovery of restaurants and bars, not adding to their financial burden with tariffs on spirits products.”

The EU’s tariff on American Whiskey, now in place for over two years, is causing severe damage to US exports and negatively impacting jobs in the US.

“Continuing tariffs on EU beverage alcohol products will only cause additional harm to hospitality businesses in cities and towns across the country that are already suffering, resulting in additional lost US jobs during these uncertain economic times,” it stated, “We urge the Administration and our EU trading partners to de-escalate this trade dispute by simultaneously removing the US tariffs on EU beverage alcohol products and the EU’s tariff on American Whiskey.”

The longer these disputes are unresolved, the greater the threat of even more tariffs on our industry. The EU has stated it may impose retaliatory tariffs this Fall on US rum, vodka and brandy in its parallel case at the World Trade Organisation concerning Boeing.

In addition, the EU is scheduled to increase its retaliatory tariff on American Whiskey from 25% to 50% in Spring 2021.

 

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