Statement by Chris Swonger, president and CEO of the Distilled Spirits Council, on the U.S.-UK announcement to suspend tariffs for 5 years on distilled spirits products as part of the WTO Boeing-Airbus trade dispute agreement

“The U.S.–UK agreement to suspend tariffs on distilled spirits products for five years in the long-standing WTO Boeing-Airbus dispute is another welcome and important development in our call for a return to duty-free trade in distilled spirits. We greatly appreciate the Biden administration’s leadership in resetting the important transatlantic trading relationship with the UK, which is critical to the deeply integrated U.S. and UK spirits industries.

“Securing the long-term suspension of the tariffs on distilled spirits is essential to support our producers, exporters, logistics providers–and everyone in between–which thrived as a result of the tariff-free trade with the UK that was in place from 1997-2018.

“Under today’s agreement, the UK will suspend for five years the 25 percent tariffs on U.S. rum, brandy and vodka, and the U.S. will suspend for five years the 25 percent tariffs on Single Malt Scotch, Single Malt Irish Whiskey from Northern Ireland, and liqueurs and cordials.

“Unfortunately, American Whiskeys remain the only spirit subject to tariffs in the transatlantic trade disputes due to the continued application of a 25 percent tariff in connection with a dispute on steel and aluminum. This puts American Whiskeys at a serious competitive disadvantage in the UK and the EU, our two most important export markets. Since the tariffs were imposed, American Whiskey exports to the UK have declined by 53 percent. We are pleased that the UK government has launched a consultation to review these tariffs and would encourage the UK to promptly remove its tariff on American Whiskeys.

“On behalf of the U.S. spirits industry, we commend the Biden administration for its hard work and dedication in securing the long-term suspension of the U.S.–UK tariffs on distilled spirits products in the WTO dispute. We hope this positive momentum will also lead to the prompt and permanent removal of the EU and UK’s tariffs on American Whiskeys.”

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Background:

  • The EU and the UK have been imposing a 25 percent tariff on American Whiskeys in response to the U.S. imposition of tariffs on imports of steel and aluminum. Since the tariffs were imposed in June 2018, American Whiskey exports to the EU have declined by 37 percent and to the UK by 53 percent.

 

  • In December 2020, the UK announced it would suspend the EU’s tariff on U.S. rum, brandy and vodka in connection to the WTO Boeing-Airbus dispute as of January 1, 2021.

 

  • In March 2021, the U.S. and UK agreed to suspend tariffs for four months on UK goods in connection to the WTO Boeing-Airbus disputes, including Single Malt Scotch, Single Malt Irish Whiskey from Northern Ireland, liqueurs and cordials, and certain wines for four months as they negotiated the underlying dispute. The four-month tariff suspension was set to expire on July 4, 2021.

 

  • In May 2021, the UK launched a public consultation on the tariffs it is imposing in response to U.S. steel and aluminium tariffs, including the 25 percent tariff on American Whiskeys. The deadline for comments is July 5, 2021.

 

  • Yesterday, the U.S. and EU announced a five-year suspension of tariffs on distilled spirits products as part of the WTO Boeing-Airbus trade dispute agreement. Under that agreement, the EU suspended the 25 percent tariffs on U.S. rum, brandy and vodka imposed in November 2020 for five years. In return, the U.S. suspended the 25 percent tariffs on liqueurs and cordials from Germany, Ireland, Italy and Spain, and certain wines from Germany, France and Spain imposed in October 2019, and on certain Cognacs and other grape brandies from France and Germany imposed in January 2021.