US whiskey distillers have lost out on nearly $340 million in sales to the European Union over the past two years because of a tit-for-tat trade spat between Washington and Brussels.
Exports to the European Union of bourbon, Tennessee whiskey and rye whiskey have declined by a third since a 25% tariff went into effect in June 2018, according to a report released Monday by the Distilled Spirits Council of the United States.
“The tariffs have derailed a great American export success story,” Chris Swonger, CEO of the Council, said in a statement. “American distillers enjoyed two decades of unparalleled growth in the EU prior to the implementation of these retaliatory tariffs,” he added.
Tariffs act as a tax on exports and are either absorbed by producers in the form of reduced profits or passed on to consumers in higher prices.
The European Union imposed tariffs in 2018 on $3 billion worth of US goods, including whiskey, motorcycles and denim, in response to US tariffs on EU steel and aluminum put in place by the Trump administration. The tariffs temporarily boosted profits at American steelmakers, but problems quickly returned to the industry and US Steel (X) announced plans to close a mill near Detroit late last year.
“It’s time for the United States and European Union to resolve trade issues and remove all spirits tariffs, so US and EU distillers can get back to building their businesses and supporting their local economies,” said Swonger.