Last week, the ongoing trade war between the US and the EU seemed to have escalated. It was announced that the EU was planning on introducing a 50% tariff on €26 billion worth of American goods, including American whiskey, from 1st April in retaliation to the Trump administration’s tariff of EU steel and aluminium.
In response, President Trump threatened to impose a staggering 200% tariff on on EU-made spirits and wine entering the US.
It appears as if tensions have eased, for now at least. On 20th March, the EU announced that they are postponing the introduction the 50% tariff on American whiskey until 13th April. This grants all parties a couple of weeks to negotiate and hopefully find a solution.
Maroš Šefčovič, European trade commissioner, told the European Parliament: “We are now considering to align the timing of the two sets of EU counter-measures so we can consult with member states on both lists simultaneously, and this would also give us extra time for negotiations with our American partners.”
Imposing a tariff on American whiskey hasn’t been a popular move among EU leaders. French prime minister François Bayrou has previously said that the EU was “probably mistaken” in targeting American whiskey.
This sentiment is shared by Italian prime minister Giorgia Meloni - a Trump ally in Europe -, who said: “I am not certain that responding to tariffs with more tariffs is necessarily a good deal. For this reason, I believe Italy’s efforts should be directed toward seeking common-sense solutions between the United States and Europe, guided more by logic than by instinct.”
Elsewhere, Irish taoiseach Micheál Martin welcomed the delay in postponing the tariffs. He believes the additional time will allow the EU “wisely and strategically respond” to measures imposed by the US.
The delay has been met with approval Stateside as well. Chris Swonger, president and CEO of the Distilled Spirits Council of the US, said the delay is “a very positive development and gives US distillers a glimmer of hope that a devastating 50% tariff on American whiskey can be averted.”
He continued: “Over the past three years that these EU tariffs have been suspended, American whiskey exports to the EU have soared, supporting jobs at US distilleries as well as local farms. We urge the EU and US to reach an agreement that will return and safeguard zero-for-zero tariffs for spirits trade, benefitting the spirits and hospitality sectors. The spirits industry is a model for growth through fair and reciprocal trade at zero for zero tariffs.”
News of tariffs being imposed on whiskey and other spirits by the US and their trade allies has been grabbing a lot of headlines in recent weeks. It’s an ever-changing situation and there’s likely to be more to-ing and fro-ing in the coming weeks and months.
For more information on the context of the US-EU trade dispute, check out our previous article ‘EU Takes on Trump with Tariff on US Whiskey.’
And if you’d like to know more about some of the other trade disputes affecting American whiskey, we’ve covered this in our piece ‘US Distillers React to Trump's Tariffs.’
