Tariff Threat Reemerges As U.S.-E.U. Negotiations Grind To A Halt

With the drinks industry still confronting the challenges presented by the Covid-19 pandemic, another significant obstacle to growth has reemerged in the form of threatened U.S. tariffs on a host of European wine and spirits products.

The preliminary tariff list released yesterday by the U.S. Trade Representative (USTR) appears to closely mirror the one from December, threatening increased or new tariffs on most wine and spirits categories. The new product list includes Scotch whisky, Irish whiskey, other whiskies and grape brandy (from all E.U. members), vodka and gin from the U.K., Germany, France, and Spain. and liqueurs and cordials from all other E.U. members not currently facing tariffs. This list builds on the existing 25% tariffs on single malt Scotch whiskies and French, Spanish, German, and U.K. wines that went into effect last October. The USTR will begin accepting comments on the proposal through its online portal on June 26.

The tariff battle stems from the ongoing dispute between the E.U. and U.S. over aircraft subsidies. Last year, the WTO ruled that E.U. subsidies to Airbus were illegal, providing fuel for the U.S. tariff effort, but a similar ruling is expected shortly on U.S. subsidies to Boeing. The two sides are also at odds over the E.U.’s proposed digital services tax, which would affect U.S.-based tech giants.

“The longer these disputes go unresolved, the greater the threat of even more tariffs on our industry,” DISCUS noted in a statement. “The E.U. has stated it may impose retaliatory tariffs on U.S. rum, vodka, and brandy in its parallel case at the WTO concerning Boeing.”—Daniel Marsteller

Tagged : Tariffs

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