U.S. whiskey distillers can now breathe a sigh of relief as the European Union has extended the suspension of tariffs on their products until March 31, 2025, preventing a looming 50% tax on shipments to Europe.
This move follows a broader steel and aluminum dispute between the U.S. and the EU. The 50% tariff, initially set to take effect in the new year, has been a point of contention since 2018 when former President Donald Trump imposed tariffs on steel and aluminum, prompting retaliatory measures from the EU. (inside.beer, 24.4.2018)
The extension is seen as a positive development for American whiskey makers, who saw a 29% increase in exports to the EU in 2022 compared to the previous year, reaching pre-trade dispute levels of USD 566 million. However, the industry remains cautious, urging President Joe Biden to negotiate a permanent resolution to tariff disputes to ensure sustained growth in the crucial international market. The extension also depends on the U.S. reciprocating with the suspension of steel and aluminum taxes to the EU.
Despite the tariff relief, American whiskey is facing challenges in the domestic market, where agave-based spirits like tequila and mezcal have surpassed it in growth and popularity. Brown-Forman, a major whiskey producer, reported weak whiskey sales, emphasizing the need for continued efforts to secure the industry's international standing.