An industry group representing the US drinks sector has urged the country's government to secure an agreement with the EU in order to prevent the reintroduction of stiff tariffs on whiskey and other spirits.
Brussels had imposed levies of 25 percent on imports of US products between 2018 and 2022 in retaliation for US duties on steel and aluminum imports. The tariffs were suspended in January last year following talks between the two sides, but the temporary agreement is set to expire at the end of 2023.
If a more permanent solution is not reached, tariffs would be introduced, but at a higher rate of 50 percent from January 2024, which the Toasts not Tariffs Coalition warned would be devastating to US producers.
The group, which includes more than 50 industry associations and states' guilds, has written to US trade representative Katherine Tai and secretary of commerce Gino Raimondo urging them to continue talks with the EU to avoid such a situation.
It noticed that US distillers enjoyed tariff-free access to European markets for over 20 years from 1997 to 2018 prior to the tariffs, adding the impact of the duties was immediate and severe.
In the years the levies were in place, American whiskey exports to the EU dropped by 20 percent, from $552 million a year to $440 million. However, since the suspension in January 2022, exports have recovered strongly, rising by 32 percent compared to 2021. This means the EU now accounts for more than 44 percent of global American whiskey exports.
"If the retaliatory tariff on American whiskey returns at 50 percent, it will bring this growth to a screeching halt and once again put American whiskey exporters at a competitive disadvantage in our single largest export market," the letter stated.