It’s been about five minutes since we last wrote about trade tariffs and their affect on the global whisky industry, but here we are again.
On 20th February the US Supreme Court ruled that President Trump had unlawfully introduced 10% tariffs on almost all goods from all countries entering the US. The majority of judges voted against the tariffs, arguing that the president could not legally use his emergency powers to invoke duties.
Over this past weekend, Trump responded to the Court’s ruling by vowing to raise these tariffs from 10% to 15%.
Writing on social media Trump said that the ruling was “extraordinarily anti-American”, adding: “During the next short number of months, the Trump administration will determine and issue the new and legally permissible tariffs, which will continue our extraordinarily successful process of making America great again – greater than ever before.”
A never before used law titled Section 22 is the basis for Trump’s latest tariff plan, which will allow for tariffs to be put in place temporarily up to a maximum of 15% for 150 days.
Trade bodies had initially reacted positively to the Supreme Court’s ruling. For example, The Distilled Spirits Council of the US (Discus) hoped that the ruling would create a pathway to tariff-free trade - a long-standing goal for the organisation.
Chris Swonger, Discus CEO, said: “As the administration navigates the implications of the Supreme Court’s decision, we urge them to take this opportunity to secure a permanent return to zero-for-zero tariffs on spirits products with our major trading partners, such as the EU and UK.
“The elimination of tariffs on distilled spirits would provide much-needed certainty for American spirits exporters while helping ease financial pressures on bars, restaurants and retailers at a time when affordability remains a major concern for consumers.”
At the time of writing, Discus have not formally responded to Trump’s promise to not just stick with but raise his tariffs.
Similarly, UK-based industry groups such as the Scotch Whisky Association (SWA) have not commented on the situation. However, the SWA has previously been aligned with Discus in advocating tariff-free trade and are unlikely to welcome the news of increased global tariffs.
(For more context on the relationship between Discus and the SWA, check out our previous article “US & UK Trade Bodies Unite Against Tariffs.”)
Stephen Davies, chief executive of Welsh whisky maker Penderyn, has openly criticised Trump’s latest plans: “This is bad news for Welsh whisky and the entire premium malt sector, which is still recalibrating after a turbulent year. It’s equally bad news for the US liquor business, which will see higher prices and fewer choices.”
As things stand, it’s unclear how Trump’s latest declaration of sweeping tariffs will affect countries and trade blocs - such as the UK and EU - who reached trade-agreements with Trump last year. There’s also the question if this latest threat of 15% tariffs will even be able to go ahead, given the Supreme Court’s ruling last week.
Watch this space…
