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Transatlantic Alliance Calls For End To Trade War, As Tariffs Weigh Down Drinks Shipments

October 8, 2020

A transatlantic alliance of 18 trade organizations representing the U.S., E.U., and U.K. beverage sectors is urging their governments to deescalate the trade war that has resulted in lower shipments of wine and spirits from both sides of the Atlantic in recent months.

The group sent a joint letter to the United States Trade Representative (USTR) and the European Commission for Trade in response to the WTO’s recent ruling that allows the E.U. to impose $4 billion in tariffs on U.S. imports as part of the ongoing transatlantic dispute over aircraft subsidies. They fear the WTO ruling could result in further tariff escalation in the short term. “An immediate restoration of duty-free access for all distilled spirits and low tariffs for wine is essential to returning our industries to supporting jobs on both sides of the Atlantic,” the letter stated.

According to DISCUS, a 25% tariff in the E.U. caused American whiskey shipments to the bloc to fall 41% to $449 million in the 12 months through July compared with a total of $757 million two years earlier. A matching tariff on Scotch whisky in the U.S. has resulted in a 35% shipment dropoff to $852 million from last October through July against the year-earlier period. Similarly, U.S. imports of liqueurs and cordials from Germany, Ireland, Italy, Spain, and the U.K. were down by 26% to $331 million over the same timeframe.

The 25% tariffs on wines from France, Spain, Germany, and the U.K. have also taken a toll. From November through July, U.S. imports of those wines under tariff fell 54% to $575 million. “These tariffs, which have been imposed in connection with unrelated trade disputes, have generated severe economic pain for our sectors and our wider supply chains,” the alliance stated, urging regulators to come to a negotiated settlement to end the dispute and remove the damaging tariffs.—Daniel Marsteller

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