American whiskey producers welcome extended suspension of EU/US tariffs

The American whiskey sector (and indeed its EU counterparts across spirits) have been caught up as collateral damage over a series of complex US/EU trade disputes across the steel, aluminum and aircraft industries for several years.

The latest development sees the EU extend suspension of tariffs on American Whiskey in return for the continued US suspension on goods under the US "Section 232” tariffs on steel and aluminium.

It provides relief for American whiskey industry, which - before the agreement announced on Tuesday - had feared the return of hefty tariffs reaching 50% on Jan 1, 2024.

The American whiskey sector has enjoyed impressive growth over the last few years: but its success hangs in the balance of the trade disputes which continue to rumble on.

The success of American whiskey

Tariffs on European steel and aluminum exports to the US were implemented by the Trump administration in 2018; followed by EU ‘rebalancing tariffs’ on US products ranging from whiskey to motorcycles.

A suspension of tariffs was agreed in 2021​​, but this had been due to expire on January 1, 2024. Concerned by the lack of a resolution at the EU / US Presidential Summit in October, affected products had been submitted to ‘unbearable uncertainty and instability’ over the last two months.

However, the EU on Tuesday announced it would extend the suspension of tariffs on US products in the context of the steel and aluminum dispute until March 31, 2025 (while the US will suspend tariffs on steel and aluminum in return).

Why's this important? The Distilled Spirits Council of the US (DISCUS) credits the suspension of EU tariffs on American Whiskeys as a large factor in the overall rebound and success of American spirits exports over the last few years.

American Whisky accounts for around 62% of total US spirits exports (reaching a record $2.06bn in total in 2022): with the EU representing the largest and most important market. 

The return of retaliatory tariffs on American Whiskey would have reversed the rebound in US spirits exports, says DISCUS (between June 2018 and January 2022 – when the EU imposed a 25% retaliatory tariff on American Whiskeys related to steel and aluminum - American Whiskey exports to the EU plunged 20%).

Welcoming the extended suspension of EU tariffs this week, Distilled Spirits Council President & CEO Chris Swonger said: “We greatly appreciate the efforts of the Biden administration to secure an extended suspension of the EU’s retaliatory tariffs on American Whiskeys. This agreement is welcome news for U.S. distillers across the country who were facing the reimposition and doubling of the EU tariff to 50% in the new year.

“We urge the Biden administration to continue striving for a permanent end to all debilitating tariffs in disputes unrelated to the spirits sector. Until the threat of these tariffs returning is fully removed, the uncertainty will continue to restrict American Whiskey export growth in our most important international market.

“The U.S. distilled spirits industry has worked hard to regain its footing in the EU market since the EU suspended its 25% retaliatory tariff on American Whiskeys in January 2022. The U.S. spirits industry has seen positive results, with American Whiskey exports to the EU bouncing back to surpass pre-tariff levels.

“This extended tariff suspension allows US spirits exporters to continue their efforts to highlight the unique quality, tastes and versatility of American spirits in the EU market.”

Industry groups seek a ‘permanent end to all debilitating tariffs’

But the steel and aluminum tariffs are not the only problem. A dispute in the civil aviation sector between Europe’s Airbus and the US-headquartered Boeing has created another series of retaliatory tariffs across various industries.

The civil aircraft tariffs are currently suspended,​ but are due to return in June 2026.

In October, a group of industry bodies – ranging form wine and whiskey to dairy and animal feed – launched a cross-industry petition calling for all tariffs to be removed for once and for all.