The Distilled Spirits Council of the United States (DISCUS) released the following statement today after the World Trade Organization (WTO) Arbitrator issued a report stating that the European Union (EU) may impose tariffs on U.S. imports valued at $4 billion in connection with the WTO Boeing dispute:
“Instead of further escalation, we hope the U.S. and the EU will come back to the negotiating table and agree to the immediate and simultaneous removal of tariffs on U.S. and EU distilled spirits with a commitment not to impose any additional tariffs on other distilled spirits. The EU previously indicated it may impose tariffs on U.S. rum, brandy and vodka in this dispute. The escalation of tariffs on the distilled spirits sector, by either the U.S. or EU, will only increase harm to our industry, which is unrelated to the trade dispute.
“The spirits industry and hospitality sector are facing incredible economic harm due to the mandatory closings of restaurants, bars and distillery tasting rooms in response to the outbreak of COVID-19. An immediate restoration of duty-free access for all distilled spirits is essential to returning our industry to supporting jobs on both sides of the Atlantic.”
The WTO’s Dispute Settlement Body must adopt the arbitrator’s report before the EU may impose tariffs on U.S. imports.
Last week, DISCUS, along with 17 other U.S. and EU associations representing the U.S., European and UK beverage alcohol and related sectors, sent a letter to the United States Trade Representative and the European Commission for Trade expressing their shared opposition to tariffs on wine, distilled spirits and beer, and urging for their immediate elimination.
BACKGROUND
Tariffs Continue to Wreak Havoc on U.S. & EU Distillers:
- According to a DISCUS analysis, American Whiskey exports to the EU (which includes the United Kingdom until it departs the EU customs union) have tumbled by 41 percent, costing producers more than $300 million since the EU’s 25 percent retaliatory tariff went into effect in June 2018.
- 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 the United Kingdom. According to the latest data available, U.S. imports of Scotch Whisky are down by nearly 34 percent between October 2019 and August 2020 ($949 million) compared to October 2018 through August 2019 ($1.43 billion). U.S. imports of liqueurs and cordials from Germany, Ireland, Italy, Spain and the United Kingdom are down by approximately 28 percent between October 2019 and August 2020 ($371 million) compared to October 2018 through August 2019 ($514 million).