US spirits industry applauds UK for suspending retaliatory tariffs

The US spirits industry has applauded the UK’s decision to suspend retaliatory tariffs on American rum, brandy and vodka once it leaves the EU on January 1.

The Distilled Spirits Council of the United States called it “a hopeful sign” in the struggle to end the ongoing tariff war.

The feud between the US and the EU began 16 years ago over subsidies for Boeing and Airbus. It has escalated in recent years, and the drinks industry has been caught in the crossfire.

In March 2018, the US imposed a 25% tariff on European steel and a 10% tariff on European aluminium. The EU responded with a retaliatory tariff on American whiskey, Levis’s and Harley-Davidson motorbikes.

The US then added a 25% tariff on various European wines and spirits, including Scotch whisky, in October 2019. The EU hit back last month, slapping a 25% retaliatory tariff on imports of US rum, brandy, vodka and vermouth.

Exports have plummeted on either side of the Atlantic as a result of the tariffs.

The UK is leaving the EU at the end of December, and it is now able to set out its independent approach to the longstanding trade conflicts between the EU and US around steel, aluminium and aerospace tariffs. 

The UK Department of International Trade said it would scrap the tariffs on rum, brandy, vodka and vermouth.

International trade secretary Liz Truss (pictured) said: “As an independent trading nation once again, we finally have the ability to shape these tariffs to our interests and our economy, and to stand up for UK business.

“Ultimately, we want to de-escalate the conflict and come to a negotiated settlement so we can deepen our trading relationship with the US and draw a line under all this. We are protecting our steel industry against illegal and unfair tariffs – and will continue to do so – but are also showing the US we are serious about ending a dispute that benefits neither country.”

DISCUS responded by saying: “We applaud the UK government for its decision to suspend the recent retaliatory tariffs on U.S. rum, brandy, and vodka.

“This is a hopeful sign that a resolution to the debilitating tariffs on U.S. & UK spirits may be in reach. We urge the United States to seize this opportunity to intensify its engagement with the UK to settle the WTO Boeing/Airbus disputes as well as the Section 232 steel and aluminum tariffs.

“We call on the US and UK to build on this positive momentum by eliminating the UK’s retaliatory tariff on American Whiskey and US tariffs on single malt Scotch, single malt Irish whiskey from Northern Ireland, and liqueurs and cordials.

“Since the EU’s 25% retaliatory tariff went into effect in June 2018, American Whiskey exports to the UK, our second largest American whiskey export market, have tumbled by 55%.

“As the new year approaches, we urge both the US and UK to seek a fresh start to trade relations by immediately suspending tariffs on US and UK distilled spirits as they negotiate an agreement to simultaneously eliminate retaliatory tariffs on distilled spirits, which will benefit the struggling hospitality businesses on both sides of the Atlantic.”