Whiskey Exports Go Down the Drain as EU Sets to Raise Tariff by June

By Thomas Price Monday, March 22, 2021

Following several escalations in trade tensions between Europe and the United States (US) over the past few years, tariffs were eventually placed on several different items that are routinely exported and imported between the European Union (EU), the United Kingdom (UK), and the US. This has notably affected the whiskey business, with retaliatory tariffs being placed on all sides. However, while this has already been a major dampener on international sales for several companies, business looks to take an even larger turn for the worse in the near future as the EU plans to raise the tariff on American whiskey imports even higher.

Whiskey barrels in a cellar.

Ongoing Tariffs and Effects on Sales

As it currently stands, there is a 25% tariff on all imports of American whiskey in both the UK and the EU. While the US had previously held a 25% tariff on European whiskey entering the country under the Trump administration, that tariff was suspended earlier in March.

The upcharge, which began as retaliation for tariffs imposed on European steel and aluminum, has now remained beyond the initial trade tension. This has left many American whiskey companies struggling to maintain business with the EU and UK given the severely decreased margin of profit. In fact, exports to the EU have already fallen by 37% since the tariff was initially imposed.

For American whiskey in the UK, the drop in exports was even starker, with a fall of 53% since 2018. The difficulties of the tariff affect whiskey companies that are bringing the product to Europe because they must either absorb the cost on their own, severely dropping their profit margin; for smaller companies, this results in a loss. If a company decides against this, the cost of the tariff is then transferred onto the consumer, where the price increase could result in a major drop in business sales.

Upcoming Increase in EU Tariff

Despite the already decreased export from American whiskey companies, business looks to take a turn for the worse in the near future, with the EU planning to double the whiskey tariff to 50% by June. The increase has many whiskey companies worried, while several others have simply given up on doing business in Europe despite the major revenue it has provided for so many years. While many politicians in the US have argued in favor of fighting the tariffs imposed on whiskey by the EU and UK, little progress has been made up to this point.

When commenting on the ongoing tariff dispute, The Distilled Spirits Council of the United States (DISCUS) said in a statement, “Swift removal of these tariffs will help support U.S. workers and consumers as the economy and hospitality industry continue to recover from the pandemic.”

Newly appointed US trade envoy Katherine Tai looks to engage in significant talks with both UK and EU officials on the matter. In the meantime, small whiskey businesses and major companies will continue to struggle considering how large of a market Europe remains to be for them.

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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