Distilled Spirits Council of the United States Statement in Response to
U.S. Decision to Maintain Retaliatory Tariffs on EU Distilled Spirits Products
Today USTR announced the existing 25 percent tariffs will remain on Single Malt Scotch Whisky, Single Malt Irish Whiskey from Northern Ireland, and liqueurs and cordials from Germany, Ireland, Italy, Spain and the UK.
We appreciate that USTR has decided not to further escalate tariffs on distilled spirits products, and we hope that this decision sets the stage for the U.S. and EU to quickly find a path forward to resolve these longstanding trade disputes.
The U.S. hospitality industry is facing its biggest challenges in decades. Restaurants and bars on both sides of the Atlantic have been pummeled 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 U.S. exports and negatively impacting jobs in the U.S.
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 U.S. jobs during these uncertain economic times.
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 U.S. rum, vodka and brandy in its parallel case at the World Trade Organization (WTO) concerning Boeing. In addition, the EU is scheduled to increase its retaliatory tariff on American Whiskey from 25 to 50 percent in Spring 2021.
We urge the Administration and our EU trading partners to de-escalate this trade dispute by simultaneously removing the U.S. tariffs on EU beverage alcohol products and the EU’s tariff on American Whiskey. We stand ready to work with both governments to get these issues resolved. A return to the 1994 zero-for-zero tariff agreement on both sides of the Atlantic will be instrumental to the spirits industry’s future success and job creation in the U.S., EU and UK.
Background:
Since October 18, 2019, the U.S. has imposed a 25 percent tariff on imports of Single Malt Scotch Whisky; Single Malt Irish Whiskey from Northern Ireland; liqueurs and cordials from Germany, Ireland, Italy, Spain, and United Kingdom; According to the latest data available:
- U.S. imports of Scotch Whisky are down by nearly 33 percent between October 2019-May 2020 ($723 million) compared to October 2018-May 2019 ($1.01 billion).
- U.S. imports of liqueurs and cordials from Germany, Ireland, Italy, Spain and the United Kingdom are down by approximately 23 percent between October 2019-May 2020 ($288 million) compared October 2018-May 2019 ($372 million).
In a separate dispute, the EU has imposed a retaliatory tariff of 25 percent on all U.S. Whiskey imports since June 22, 2018. According to a DISCUS analysis, American Whiskey exports to the EU have tumbled by 33 percent and cost $300 million since the EU’s 25 percent retaliatory tariff went into effect. The EU is scheduled to increase its retaliatory tariff on American Whiskey to 50 percent in spring 2021.
July 26 Beverage Alcohol Coalition Comment to USTR
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