American Whiskey distillers hoped this summit would result in an agreement that ensured the tariffs on American Whiskey would not return in the new year.
Without this agreement, American Whiskey distillers are facing the serious threat of the reimposition and doubling of the EU tariff to 50% beginning on January 1, 2024.
Since the EU suspended its 25% retaliatory tariff on American Whiskeys in January 2022, American Whiskey exports to the EU have bounced back and surpassed pre-tariff levels. The U.S. distilled spirits industry has worked hard to regain its footing in the EU market and a return of the tariffs would bring this positive momentum to a screeching halt.
Background on U.S./EU steel and aluminum dispute:
- In June 2018, the EU imposed a 25% retaliatory tariff on American Whiskeys in response to U.S. Section 232 tariffs on steel and aluminum.
- Due to the imposition of the retaliatory tariff, American Whiskey exports to the EU, our largest American Whiskey export market, plunged 20%, from $552 million to $440 million (2018-2021).
- In October 2022, the U.S. and EU agreed to suspend the EU’s 25% retaliatory tariff on American Whiskeys for two years starting January 1, 2022.
- As a result of the tariff suspension, American Whiskey exports to the EU increased by 29% in 2022 compared to 2021, reaching $566 million in 2022. This accounted for 44% of all American Whiskey exports, surpassing the pre-tariff level of $518 million in 2017. Through July 2023, American Whiskey exports to the EU are up nearly 91% as compared to the same period in 2022 (January-August).
- If an agreement between the U.S. and EU is not reached, the EU will reimpose and double its retaliatory tariff on American Whiskeys at a rate of 50%, effective January 1, 2024.