LOUISWILL, K. (MS) –
Dependence on Trump-era tariff disputes could become even more painful for American whiskey distillers if their turmoil in the transatlantic trade struggle is not resolved soon.
Bourbon, Tennessee Whiskey և The rye whiskey has escaped the latest breakthroughs to re-establish US trade ties with the European Union and the United Kingdom under Donald Trump’s presidency. Tariffs for some alcoholic beverages have been suspended, but the 25% tariffs slapped by the EU և UK for American whiskey remain in force. And the EU tariff rate is expected to double in June to 50% of the whiskey producers’ main export market.
The leading ombudsman asks Catherine Thai, the chief trade officer of the United States, not to leave whiskey producers behind. The United States Spiritual Council has urged him to demand an immediate end to European tariffs and to secure agreements to remove them.
“The rapid abolition of these tariffs will help support U.S. workers and consumers as the economy and the hospitality industry continue to recover from the epidemic,” the council said in a recent statement after Tai approved the Senate.
American whiskey producers have been embroiled in a transatlantic trade dispute since mid-2018, when the EU imposed tariffs on American whiskey and other US products in response to Trump’s decision to slap tariffs on European steel and aluminum.
Since then, US whiskey exports to the EU have fallen by 37%, which has cost hundreds of millions of whiskey distillation revenues in 2018-2020. US whiskey exports to the United Kingdom, the industry’s fourth-largest market, are said to have fallen by 53% since 2018.
Tariffs are a tax that whiskey producers can either absorb with reduced profits or pass on to customers at higher prices, risking losing market share in highly competitive markets.
Amirk Pay, owner of the James E. Pepper Distillery in Lexington, Kentucky, says American whiskey has become a “collateral loss” in commercial disputes. It cost him about three-quarters of his European business, և the expected 50% EU tariff threatens to dry up the balance.
“It could put an end to our business in Europe, as we have known for years,” Pine said in a telephone interview on Thursday.
He has already cut some whiskey shipments to Europe as a precaution against a possible doubling of EU tariffs. The bourbon եկ rye brand of his distillery is James E. Pepper 1776.
Peay has spent years և investing heavily in European markets, especially in Germany, France and the UK. He was going to double his European business before the trade disputes started.
“As the road goes, so everything we have invested so far seems to be destroyed,” he said.
Tariffs have hurt the giants of the alcohol industry.
“We estimate that our company has borne 15% of the total tariff levied on the United States in response to steel-aluminum tariffs,” said Lawson Whiting, of Louisville-based Brown-Forman Corp. in Louisville, Kentucky. Chairman և Executive Director. “They have become a big problem for us, we need to solve them as soon as possible.”
Brown-Forman’s flagship product is Jack Daniel’s Tennessee Whiskey, a global brand.
Tariffs for Kentucky bourbon manufacturers reduced their exports by 35% by 2020, and EU cargo fell sharply by almost 50%.
The EU has traditionally been the world’s largest market for Kentucky distilleries, accounting for 56% of total 2017 exports. It now stands at about 40%, according to the association.
“With our signature, the bourbon industry has suffered significant losses for more than two years because of a trade war that has nothing to do with whiskey,” said KDA President Eric Gregory. “And it would be much worse if we could not resolve this dispute.”
The company estimates that Kentucky distilleries account for 95% of the world’s bourbon supply.
Հ The thawing of US disputes with the EU և UK was part of Airbus-Boeing’s long-standing dispute. The tariffs were levied on duties levied on some alcoholic beverage companies on both sides of the Atlantic. But the advances left many unresolved, including disputes that led to retaliatory tariffs still hitting American whiskey.
The suspended tariffs mean that some European spirits producers can ship their goods from the United States without customs clearance, while American whiskey producers are still subject to tariffs.
“We just want a level playing field for American whiskey,” he said.