US spirits industry calls for removal of retaliatory tariffs

Imports and Exports | | MIC Customs Solutions |

A US trade group has called on the country's government to ensure retaliatory tariffs on spirits exports imposed by the EU and UK are permanently removed.

A group representing the spirits industry in the US has urged negotiators in the country to make the permanent removal of retaliatory tariffs and other trade barriers a top priority in the coming years.

In a report filed with the US Trade Representative, the Distilled Spirits Council of the United States (DISCUS) highlighted a range of measures that harm the export of beverages such as bourbon whisky, including discriminatory taxes, regulatory standards, and certification and labeling measures, as well as additional duties.

Robert Maron, vice-president for international trade at DISCUS, said international trade is critical to the long-term viability of the US distilled spirits sector.

"US spirits exports have expanded significantly over the past two decades," he said, noting that this has been in large part due to market-opening trade agreements. Mr Maron added: "However, US spirits continue to face an array of new and existing tariff and non-tariff barriers in export markets."

DISCUS highlighted the imposition of retaliatory tariffs by the EU and US on spirit exports between 2018 and 2021, in response to a dispute over steel and aluminum subsidies.

During this period, total US spirits exports were down by 12 percent to $1.6 billion, with  American whisky exports falling by 18 percent to $975 million.

Although these tariffs have since been suspended - leading to a return to growth for the sector's exports - distillers of all sizes have had export contracts canceled due to trade barriers, which is having knock-on effects on investment and growth plans in the sector.

Among the most onerous duties include a 150 percent tariff on exports to India and a 45 percent levy imposed by Vietnam. Elsewhere, the EU, Brazil, Thailand, Indonesia, Peru and Costa Rica all apply additional taxes on imported spirits, while countries including Singapore, Brazil, India, Malaysia and South Africa all have or are considering labeling requirements that could add unnecessary burdens to US exporters.

"We strongly urge the administration to secure the permanent return to zero-for-zero tariffs on spirits with the EU and UK," Mr Maron continued. "If the retaliatory tariffs were to return, they would reverse the rebound in US spirits exports that has been seen through August 2022."