By Kevin Gibson

The European Union this morning announced its decision to extend the suspension of its tariffs on U.S. products until until March 31, 2025. The tariffs included American Whiskey.

Initially implemented during the Trump Presidency, the EU rebalancing tariffs on U.S. exports were a response to the U.S. “Section 232” tariffs on steel and aluminum. The 25% retaliatory tariff on American Whiskeys were implemented In June 2018.

Distilled spirits advocacy groups praised the extension.

“We greatly appreciate the efforts of the Biden administration to secure an extended suspension of the EU’s retaliatory tariffs on American Whiskeys,” Distilled Spirits Council of the United States President and CEO Chris Swonger said in a statement. “This agreement is welcome news for U.S. distillers across the country who were facing the reimposition and doubling of the EU tariff to 50% in the new year.”

Swonger urged the Biden administration to continue working toward a permanent end to the tariffs.

“Until the threat of these tariffs returning is fully removed,” Swonger said, “the uncertainty will continue to restrict American Whiskey export growth in our most important international market.”

The Kentucky Distillers’ Association said it “welcomes the news.”

KDA President Eric Gregory noted that the retaliatory tariffs were set to double to 50% on January 1, saying that increase “Would have caused a devastating blow to our signature industry and the 22,500 hard-working Kentuckians it employs, as well as the countless wholesalers, retailers, and supply chain partners in E.U. countries that count on its future well-being.”

He pointed out that the U.S. and EU had free access to each other’s markets for more than two decades, helping the import/export market to surge.

“To that end, we strongly urge E.U. and U.S. officials to permanently end the tariffs sooner than later,” Gregory said. “Our signature industry has worked hard to recover and regain footing from the last short-term suspension of tariffs. As Bourbon takes years of aging to perfect, a permanent solution will bring certainty to our distillers as they look to continued growth and investments in international markets.”

As a result of the EU tariffs, American Whiskey exports to the EU, the largest American Whiskey export market, plunged 20%, from $552 million to $440 million between 2018 and 2021. However, in October 2022, the U.S. and EU agreed to suspend the EU’s 25% retaliatory tariff on American Whiskeys for two years starting January 1, 2022. American Whiskey exports then increased 32% to $1.28 billion in 2022 over 2021.

American Whiskeys accounted for 62% of all spirits exports in value terms, and 23% in volume terms during that time post-tariffs. The top five markets for American Whiskeys in 2022, according to DISCUS, were: 1) European Union ($566 million); 2) Australia ($117 million); 3) United Kingdom ($112 million); 4) Japan ($102 million) and; 5) Canada ($80 million).

Earlier this month, U.S. Senators Catherine Cortez Masto (D-Nev.), Todd Young (R-Ind.), Tim Kaine (D-Va.), and Rand Paul (R-Ky.) wrote a letter to the Biden Administration urging action to stop the tariffs from resuming.

The tariffs had been set to resume on Jan. 1.

“The U.S. distilled spirits industry has worked hard to regain its footing in the EU market since the EU suspended its 25% retaliatory tariff on American Whiskeys in January 2022,” Swonger said. “The U.S. spirits industry has seen positive results, with American Whiskey exports to the EU bouncing back to surpass pre-tariff levels.

“This extended tariff suspension allows U.S. spirits exporters to continue their efforts to highlight the unique quality, tastes and versatility of American spirits in the EU market.”