Marketing

Irish whiskey in new US trade tariffs

The US is considering adding new tariffs onto the EU on $3.1 billion-worth of exports on top those already present.
Among those in the US Trade Representative sights are products such as olives, beer and gin as well as Irish whiskey.

Among those in the US Trade Representative sights are products such as olives, beer and gin as well as Irish whiskey.

Among those in the US Trade Representative sights are products such as olives, beer and gin as well as Irish whiskey. The move could well lead to a spiralling transatlantic trade war this Summer with tariff increases of up to 100%.

At $670 million, US imports of Scotch and Irish Whiskey were down nearly 28% between October last year and April this year compared to the similar period from October 2018 to April 2019 ($936 million).

At $267 million US imports of liqueurs and cordials from Germany, Ireland, Italy, Spain and the UK were down by approximately 21% between last October and April this year compared to the $336 million figure for the same period from October 2018 to April 2019).

“Over 99% of Irish whiskey exports to the US are excluded from the current tariffs imposed by the US” stated Drinks Ireland|Irish Whiskey Association’s William Lavelle, “We are disappointed that a small number of Northern Irish single malts have been subjected to tariffs.

“The United States is the largest market for Irish whiskey exports. The Irish whiskey industry makes a substantial contribution to the US domestic economy in terms of barrel purchases, tax receipts and advertising spend. These tariffs undermine the current high levels of trade and investment by the Irish whiskey industry which to date have benefitted both the US and Irish economies.

“We are calling on the US and EU 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.”

In a response to the US government’s request for ‘public input’ over the course of the next month, the Distilled Spirits Council of the US has stated that it, “strongly opposes any additional spirits tariffs which would only escalate trade tensions across the Atlantic and further jeopardise American companies and hospitality jobs already under duress as a result of Covid-19.

“EU and US distilled spirits companies have suffered enough as a result of this trade war. Since October 18 2019 the US has imposed a 25% tariff on imports of Single Malt Scotch Whisky, Single Malt Irish Whiskey from Northern Ireland and liqueurs and cordials from Germany, Ireland, Italy, Spain and United Kingdom.

“Since June 22 2018 the EU has imposed a retaliatory tariff of 25% on all US Whiskey imports.”

With tariffs already imposed on some $7.5 billion-worth of EU goods – including wine, spirits and liqueurs – into the US, a new DISCUS report released to mark the two-year tariff anniversary found that American Whiskey exports to the EU have tumbled by 33% and cost $300 million since the EU’s 25% retaliatory tariff went into effect.

“The longer these disputes go unresolved, the greater the threat of even more tariffs on our industry,” stated the DISCUS, “The EU has stated it may impose retaliatory tariffs this Spring on US rum, vodka and brandy in its parallel case at the WTO concerning Boeing. In addition, the EU is scheduled to increase its retaliatory tariff on American Whiskey to 50% in Spring 2021.

“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.

“We will be participating in the comment process to register our strong opposition to any tariffs on distilled spirits products.”

 

Sign up for Drinks Industry Ireland

Get a free weekly update on Drinks Industry trade news, direct to your inbox. Sign up now, it's Free