Distilled Spirits Council of the United States President & CEO Chris Swonger statement on the signing of the Phase One trade agreement between the United States and China

“The Phase One trade agreement between China and the United States, which led to China’s suspension of additional tariff increases on certain U.S. spirits products, is a sign of real progress and a welcomed first step.  We appreciate the Trump Administration’s efforts to address longstanding trade barriers with China.

We commend China and the Trump Administration for working to de-escalate the trade dispute and urge both governments to continue negotiations towards a Phase Two deal that removes the retaliatory tariffs that currently remain in place on U.S. spirits products, including American Whiskey, rum, gin, vodka, liqueurs and cordials and brandy.

Prior to this trade dispute, U.S. spirits exports to China, the world’s largest spirits market, increased 128 percent over the past decade.  The retaliatory tariffs have brought this phenomenal growth to a halt with American spirits exports to China declining eight percent between Jan.- Nov. 2019 compared to the same timeframe in 2018. ”

Background:

In connection to the announcement of the Phase One agreement on December 13, 2019, China agreed to suspend tariff increases on U.S. distilled spirits, including American Whiskey, gin, liqueurs and cordials, and brandy.  These tariff increases were originally scheduled to go into effect on December 15, 2019.

Retaliatory tariffs still remain on American Whiskey (imposed on July 6, 2018) and on rum, gin, vodka, liqueurs, and brandy (imposed on September 24, 2018) in response to the U.S. Section 301 actions.

Current ad valorem tariff rates (MFN + retaliatory tariffs) will remain in place.  They are:

  • 30%: whiskey and brandy
  • 35%: gin, liqueurs and cordials, and other distilled spirits
  • 40%: rum and vodka

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