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Toasts Not Tariffs issues plea to Trump

Toasts Not Tariffs, a coalition of 52 US drinks businesses, has written an open letter to President Donald Trump voicing its concerns over the prospect of another international tariff war.

When Trump won the election in November, one of the key concerns from the alcoholic beverages sector was the reintroduction of tariffs on imports into the US, including drinks, and, in retaliations, tariffs from affected countries on US products, such as Bourbon.

Later that month, Distilled Spirits Council of the United States (DISCUS) president Chris Swonger told Reuters that he would ask for an “exemption” from Trump’s tariffs “based on the distinct origin” of drinks such as Scotch whisky, Tequila and Cognac.

In a new letter to Trump, sent on Friday (31 January), the Toasts N0t Tariffs movement warns that “new tariffs on imported wine and spirits would harm, not help, American businesses, threatening the livelihood of tipped workers and small businesses across the country.”

“In fact,” the letter continued, “we estimate that a 10% tariff on imported wine and distilled spirits could result in over 38,000 American job losses across production, distribution, hospitality, and retail and nearly US$3.3 billion in lost sales. A 20% tariff could cost 74,000 U.S. jobs and nearly US$6.2 billion in lost sales.”

Among the signatories of the letter is the Washington Wine Institute, the Kentucky Distillers’ Association, and the Associated Cooperage Industries of America.

Backlash

It also highlighted the risk posed by “retaliation” from foreign governments and how that might “erode” key markets for US-produced drinks.

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“From 2018 to 2021, tariffs imposed by the European Union and United Kingdom on American whiskeys and other U.S. spirits in the steel and aluminium and large civil aircraft disputes led to a decline in the value of American Whiskey exports by 18%, and in total spirits exports by 12%.”

Of particular concern is the prospect of the EU bringing back its 50% tariffs on American whiskey from 1 April this year “if there is no agreement on steel and aluminium or the EU does not extend the suspension of its tariff”.

However, it seems that the Toasts Not Tariffs appeal has, for the moment at least, fallen on deaf ears, with Trump rolling ahead with 25% tariffs on Mexican and Canadian exports to the US and 10% tariffs on Chinese goods. The backlash feared has already come to pass from Canada, which is a key market from the American drinks industry, as the province of Ontario begins to remove US-produced drinks from shelves.

“Canada is a major export market for US wine and spirits, selling US wine with a retail value of more than US$1.1bn annually,” the letter noted. In 2023, Canadian imports of US spirits were worth US$262m.

“Our industry exemplifies how fair and reciprocal trade can thrive; US producers enjoy equitable access to international markets,
while American businesses benefit from fair access to imported products,” the letter argued. “Our industry stands as a model of mutually beneficial trade, where all parties – domestic and international – prosper.”

Given that Trump’s tariffs from his first term as presidency only came to an end once he had left office, concluding what Swonger called a “four year nightmare” for the sector, it could well be another challenging four years for the transatlantic spirits trade should the dispute not be resolved.

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