Trump Doesn’t Think Twice About His Looming Trade War | The Daily Show
American whiskey makers $ 340 million short of Trump’s trade wars
Over the past two years, American whiskey producers have lost hundreds of millions of dollars in trade with the European Union thanks to the mutual inflation of trade duties by Washington and Brussels..
Exports to the European Union of bourbon, Tennessee whiskey and rye whiskey have dropped by a third since the 25% tariff went into effect in June 2018, according to a report released Monday by the Distilled Spirits Council of the United States. this type of product.
«Tariffs Destroy American Export Success Story», – stated Chris Swonger, CEO of the Council. «American distillers were preceded by unprecedented growth in the EU for two decades prior to the introduction of these reciprocal tariffs», – he added.
Tariffs act as an export tax and are either absorbed by producers in the form of diminished profits, or passed on to consumers in the form of 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 steel and aluminum tariffs for the EU imposed by the Trump administration. Tariffs temporarily boosted profits for American steelmakers, but that didn’t save the industry from problems, and US Steel announced plans to close a steel mill in the Detroit area late last year..
«It is time for the United States and the European Union to resolve trade problems and remove all alcohol tariffs so that the US and EU spirits producers can return to growing their businesses and supporting their local economies.», – said Swanger.
Exports of American whiskey to the European Union would have grown by $ 337 million over the past two years if not for tariffs, according to the report. According to the Council, American manufacturers have failed to compensate for the loss of EU exports in their domestic market..
The European Union is the largest overseas market for American alcoholic beverages, accounting for more than half of all US whiskey exports last year. Whiskey exports to the EU increased fivefold from January 1997, when most tariffs were canceled, to June 2018, increasing from $ 143 million to $ 750 million a year.
That figure fell to $ 514 million at the end of 2019 and has declined further this year due to the impact of the coronavirus pandemic on the travel and hospitality sector in Europe, according to the report..
There are concerns that the European Union could impose new tariffs on American spirits like gin and rum as part of a separate trade squabble with the United States over aviation subsidies..
The US government imposed a 25 percent tariff on imports of Scotch and Irish whiskey last October as part of sanctions aimed at $ 7.5 billion in European goods. The World Trade Organization ruled that the United States could raise tariffs for goods from EU countries because the European bloc did not comply with the earlier decision on government subsidies for Airbus.
The Scotch Whiskey Association said last month that these tariffs drove US single malt whiskey exports down 27% in the last quarter of 2019. The US is the most valuable market for Scotch whiskey, with a value of over £ 1 billion ($ 1.2 billion) in 2019.
The European Union has applied to the World Trade Organization for permission to impose countermeasures on American goods after the EU claims the decision to grant subsidies to Boeing is unfair. The decision is expected in late June or early July.
The Distilled Spirits Council, the Scotch Whiskey Association and Spirits Europe are encouraging both parties to come to a mutually beneficial agreement, Swanger said. Cancellation of tariffs could help industry and, in particular, spirits producers to weather the coronavirus crisis, he added..
«The Scotch whiskey and American whiskey industries definitely want the same thing – that tariffs on our products in both the EU and the US are canceled as soon as possible.», – said the CEO of the Scotch Whiskey Association Karen Betts.