USTR doesn’t raise liquor taxes, but industry still worried
The Office of the U.S. Trade Representative did not increase tariffs on distilled spirits in a Friday announcement of adjusted tariffs in the large aircraft dispute with the European Union, but did leave a 25% tariff in place.
The USTR took the action under authorization from the World Trade Organization to take countermeasures on $7.5 billion in goods after a victory in its unfair trade practices case against the European Union, France, Germany, Spain, and the United Kingdom over aircraft subsidies. The United States is increasing the additional duty rate imposed on aircraft imported from the EU to 15% from 10%, effective March 18, and making certain other minor modifications.
The distilled spirits industry had feared the tariff would rise to 50%. In an announcement Friday, the Distilled Spirits Council of the United States urged both the United States and the European Union to resolve their disputes “so that consumers can enjoy #ToastsNotTariffs.”
The council noted that, since October 18, 2019, the United States has imposed a 25% tariff on imports of single malt Scotch whisky, malt Scotch whisky, single malt Irish whiskey from Northern Ireland, and liqueurs and cordials from Germany, Ireland, Italy, Spain, and United Kingdom.
Additionally, since June 22, 2018, the European .Union has imposed a retaliatory tariff of 25% on all U.S. whiskey imports.
According to new data released this week from the U.S. International Trade Commission, the EU’s 25% retaliatory tariff on American whiskey caused exports to the EU, the U.S. spirits industry’s largest export market, to tumble 27% in 2019 compared to 2018, the council said.
Global exports of American whiskey have declined 16% and global spirits exports are down 14.3% over the same timeframe, the council added.
“It has become abundantly clear that tariffs on distilled spirits products are causing rough seas on both sides of the Atlantic,” the council said. “We are gravely concerned that if these disputes are not resolved soon, these U.S. tariffs on EU spirits imports will cause a similar drag on the U.S. economy, jeopardizing American companies and jobs.”
“The longer these disputes are unresolved, the greater the threat of even more tariffs on our industry,” the council said.
“Specifically, the EU has stated it may impose retaliatory tariffs this spring on U.S. rum, vodka, and brandy in its parallel case at the WTO concerning Boeing. In addition, the EU is scheduled to increase its retaliatory tariff on American whiskey to 50% in Spring 2021.”
–The Hagstrom Report