U.S. Whiskey Industry Applauds End to Tariff Dispute With the E.U.

The Biden administration has negotiated an end to Trump’s steel tariff dispute.

In 2018, the Trump administration imposed tariffs on steel and aluminum from the European Union (which at the time still contained the United Kingdom). Despite not being directly tied to the spirits industry, these tariffs had a devastating effect on American whiskey producers as the E.U. targeted some of America's signature exports with retaliatory tariffs – including a 25 percent tariff on American bourbon and other whiskies.

Over the ensuing three years, the U.S. spirits industry has repeatedly called for these tariffs to be lifted, citing decreased exports and hundreds of millions of dollars in lost revenue. When the Biden administration took over, many saw a light at the end of the tunnel with hints of progress earlier this year. This weekend, American whiskey producers finally received the news they were waiting for: The U.S. and the E.U. (in an agreement that now does not include the U.K.) announced that these tariffs would be suspended starting on the first of the new year.

Bourbon whiskey neat in a glass
Brent Hofacker / Getty Images

As expected, the deal was met with joyful relief from industry groups. "After three very difficult years of sagging American Whiskey exports, the E.U. and U.S. are back to a zero-for-zero tariff agreement on distilled spirits, which has been instrumental to our export success and job creation on both sides of the Atlantic since 1997," Chris Swonger, president and CEO of the Distilled Spirits Council, said in a statement. "Since the imposition of the E.U. tariffs, American Whiskey exports to the E.U. – the U.S. spirits industry's largest export market – have plunged 37 percent, from $702 million to $440 million [from 2018 to 2020]. We have a long way to go, but are fully committed to building back American Whiskeys better in the E.U."

In his statement, Matt Dogali – president and CEO of the American Distilled Spirits Alliance (ADSA) – spoke first to the timing of the announcement. "This is welcome news given the battering that the spirits industry on both sides of the Atlantic has taken since the institution of these and other tariffs, and especially since the onset of COVID-19," he began. He later added, "[We] hope that a full termination of U.S. and U.K. tariffs impacting American and Scotch whiskies will soon follow."

Since officially "Brexiting" the E.U., the U.K. has had to take its own path sorting out these tariff situations – though both the E.U. and the U.K. have largely mirrored each other on existing American tariff issues. For instance, when resolving a wine tariff dispute tied to aerospace subsidies, a U.K. agreement with the U.S. took place just days after an E.U. deal. The spirits industry hopes to see a similar situation here. ADSA said the U.K. was in the middle of conducting a review of their tariff.

"The U.K. and the E.U. are the two biggest markets for exports of American whiskeys, so achieving a full termination of tariffs in both markets is critical for the industry," Dogali continued. "Of course, because many E.U. and U.K. distillers also sell U.S. product on-site, and American distillers also sell Scotch whisky and E.U.-made spirits such as liqueurs and brandies, the elimination of these tariffs is also critical for distillers across the pond and on the continent. It's time for trade wars to end, and for distillers to once again have the full freedom to do what they do best: Producing fine spirits for the world to enjoy."

Meanwhile, Swonger agreed that removing tariffs was a win for both parties. "Lifting this tariff burden on American Whiskeys not only boosts U.S. distillers and farmers, it also supports the recovery of E.U. restaurants, bars and distilleries hit hard by the pandemic," he said, before expressing hope for the future. "We are energized and ready to ramp up our American Whiskey promotions in the E.U. to re-introduce America's native spirits to E.U. consumers and resume a great American export success story.

Was this page helpful?
Related Articles