EU Temporarily Suspending Increase On Tariffs For American Whiskey

Bi-partisan chairs of the Congressional Bourbon Caucus called upon the Biden administration to help immediately suspend tariffs on American whiskey, and their calls were answered.

U.S. Representatives from Kentucky, John Yarmuth (Democrat) and Andy Barr (Republican), initiated a letter calling on Katherine Tai, President Joe Biden’s newly-confirmed U.S. Trade Representative, to work with the European Union and the United Kingdom to immediately suspend tariffs on American whiskey.

Their letter, signed by 48 fellow U.S. Representatives, cited the recent decline in American bourbon exports and the effect tariffs have had on all distilled spirits and wine, especially during the COVID-19 pandemic.

Woodford Reserve stills

The whiskey making stills at Woodford Reserve (image via Brown-Forman)

But now, a recent announcement from the European Union said it will temporarily suspend its tariff increase on American whiskey in an effort to rekindle transatlantic relations.

The announcement primarily focused on the suspension of tariffs imposed on U.S. steel and aluminium, and whiskey was a chief commodity included in the list.

Chris Swonger, president and chief executive of the Distilled Spirits Council, said in a prepared statement, “This news couldn’t come soon enough. Distillers across the United States are breathing a huge sigh of relief after bracing for a 50 percent tariff on American whiskeys in just a matter of days that would have forced many craft distillers out of the EU market.”

He said there is still work to be done to get EU and American spirits back to zero for zero tariffs.

“We greatly appreciate the Biden administration’s ongoing efforts to resolve these longstanding trade disputes and reduce the economic pain felt by those industries unfairly caught in the middle.”

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The Kentucky Distillers’ Association also was pleased by this result, with KDA President Eric Gregory noting “this gives both sides some breathing room to return to free and fair trade and once again level the playing field for Kentucky’s signature spirit.”

In the letter put forward by Kentucky representatives, the case was made to permanently lift the tariff burden in order to support the recovery of restaurants, bars and small craft distilleries across America that were forced to shut down their businesses during the pandemic.

American whiskey exports to the EU, its largest export market, grew from $502 million in 2008 to $702 million in 2018, an increase of 40 percent. Since the tariffs were imposed, American whiskey exports to the EU declined by 37 percent and to the UK by 53 percent.

In 2020, there were more than 2,000 craft distillers in the U.S. and American whiskey was exported from 37 states. The letter stated that 41 percent of their sales evaporated, and 31 percent of their employees have been furloughed since the start of the pandemic.