On 12 August, the US published an updated list of EU products that will face additional tariffs from 1 September 2020, in retaliation for aircraft subsidies. For spirits, nothing changed: no additional spirits were added to the list, and the applicable rates for affected spirits remains the same (25%). Still, this means that the sector is still caught up in a trade dispute about civil aircraft, totally unrelated to spirits, at a time when the focus should be on recovering from the Covid-19 related crisis.
We cannot highlight enough the damaging effect tariffs have on spirits on both side of the Atlantic, when compared with the previous tariff-free situation we enjoyed for many years prior to 2018. Following the imposition of EU tariffs in 2018, US Whiskey exports to the EU have declined by 33% (May 2019-April 2020 growth compared with the July 2017 – June 2018 period, when US spirits incurred no tariffs upon import in the EU). After the imposition of US tariffs on certain European spirits in October 2019, evidence is mounting about similar economic damage. The combined effect of tariffs and the Covid-19 crisis is affecting jobs, from production to retail, hospitality and supply chain on both sides, and we see a negative impact on productivity, competitiveness and growth across the Atlantic. We need an urgent return to the “zero-for-zero” agreement: the current economic crisis makes this all the more pressing.
We now urge both sides to intensify their efforts to find a negotiated solution, through constructive dialogue, rather than escalation. As spirits, we need #ToastsNotTariffs!