US distillers relieved as Canada and Mexico revoke whiskey tariffs

The USA, Canada and Mexico have at least reached an agreement to repeal tariffs on American whiskey.

(Photo: Buffalo Trace)

The Distilled Spirits Council, the USA’s spirits industry body, said it “welcomed” the news that Canada and Mexico would repeal retaliatory tariffs on American Whiskey in a statement released on Friday 17 May.

Last year US president Donald Trump sparked a trade war with several countries after he implemented a 25% and 10% import tariffs on steel and aluminium respectively from 1 June 2018.

In July, Canada hit back at the tariffs, raising its own duties on more than 250 US-made products – including a 10% tariff on American whiskey.

Meanwhile, Mexico has imposed a retaliatory tariff of 25% on US whiskeys, and China introduced a 25% hike on American whiskey imports.

The EU Commission meanwhile imposed a 25% tariff on imports of Bourbon and American whiskey in July 2018.

Globally, for the first six months of 2018, American Whiskey exports grew 28% to a total of $595 million, according to the Council. However, once the retaliatory tariffs had been enforced, exports during the second half of the year declined by 11%, compared to 2017, to a total of $593 million.

Chris Swonger, president and CEO of the DISCUS, thanked The US government for securing a more amicable deal with “two of our largest and most important export markets. ”

“With this critical issue now resolved, we look forward to joining the various efforts to support the prompt Congressional passage of U.S.-Mexico-Canada Agreement, which includes important benefits for our industry.

There has also been a significant slow down of exports to the European Union. The EU, which accounted for nearly 60% of all whiskey exports in 2018, recorded growth of 33% in the first half of 2018, but fell by 13.4% in the second half, as tariffs came into affect.

Swonger added that he hoped the latest update to the US’ export deals would encourage the EU to also withdraw its own 25% import tariff.

He said that the government should “build on this positive momentum to resolve all of the remaining retaliatory tariffs that our US distilled spirits exports face, particularly the European Union’s 25% tariff on American Whiskey.”

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