Last October, in the context of the long-running dispute over aircraft subsidies for Airbus, the US imposed additional import duties of 25% ad-valorem on many of our products. The US Trade Representative (USTR) is now conducting a review of the action being taken so far. As part of this review, USTR is also considering extending the range of products impacted, both in terms of countries of origin and types of products. Additional duties of up to 100% ad-valorem could be imposed on all these new categories of products – including European brandies and Irish Whiskey as well as vodka, gin and Genever from France, Germany, the UK and Spain. The final announcement should be made on or around 12 August.
Naturally, any expansion of the categories subject to tariffs would be devastating for our sector. During the last two years, we have, collectively with our US partners in DISCUS, constantly urged both sides to go back to the 1994 “zero-for-zero” agreement, and through this the mutual elimination of the vast majority of tariffs on distilled spirits between the US, EU, Canada and Japan. This agreement significantly benefitted both the U.S. and EU distilled spirits sectors, the hospitality sector, our supply chain and our consumers while it lasted. However, notwithstanding the best efforts of the European Commission to engage with USTR, and the direct advocacy for European business by Commissioner for Trade Phil Hogan over the last two years, the situation has not yet been resolved at our collective and mutual expense.
We appreciate that trade tensions between EU and U.S. are complex. However, punitive tariffs on spirits, applied following disputes unrelated to us, undermine the global growth that open markets have helped us achieve and cause our sector, the hospitality sector, our supply chain and consumers further harm. With the USTR review and the pending Boeing report in mind, we have joined forces with our US sister association DISCUS and their coalition partners, as well as with the Scotch Whisky Association, to call for both sides to go back to the negotiating table and find a negotiated solution, without dragging unrelated sectors in this dispute any further. Our message is clear: let’s go back to zero-for-zero!
