Biden Aides Urged to Get a Pact with EU to Avoid Retaliatory Tariffs

The Toasts Not Tariffs Coalition sent a letter to U.S. Trade Representative Ambassador Katherine Tai and U.S. Secretary of Commerce Gina Raimondo urging the Biden administration to secure an agreement with the EU that avoids the return of retaliatory tariffs on American Whiskeys.

The letter was sent in advance of Ambassador Tai's July 20-21 meeting with European Commission Executive Vice President Valdis Dombrovskis to continue discussions on establishing a Global Arrangement on Sustainable Steel and Aluminum.

The Toasts Not Tariffs coalition, which includes 50 associations representing the entire three-tier chain of the U.S. alcohol industry, commended the administration’s progress in resetting the important trading relationships with the EU and reaching agreements in 2021 in the steel and aluminum dispute to suspend tariffs on American Whiskey for two years, and in the WTO Boeing-Airbus dispute to suspend tariffs on U.S. and EU spirits and wines for five years.

U.S. spirits had duty-free access to the EU between 1997-2018. The EU’s 25% retaliatory tariff on American Whiskeys, which was imposed between June 2018 and December 2021, had a devastating impact on distilleries across the United States. During that period, American Whiskey exports to the EU plunged 20%, to $440 million from $552 million .

The coalition stated the agreements “to suspend tariffs were significant steps in the right direction to rebuild the U.S.-EU trading relationship and have helped American Whiskey exporters located in 41 states begin to regain lost market share.”

Since the EU suspended its 25% retaliatory tariff on American Whiskeys in January 2022, American whiskey exports to the EU increased by 32% compared to 2021, reaching $566 million and accounting for 44% of global American Whiskey exports.

The group underscored the urgency of a resolution pointing out that a failure to reach an agreement would lead to the EU’s reimposition of retaliatory tariffs on all American Whiskeys, but this time at a rate of 50% percent effective Jan. 1, 2024.

“If the retaliatory tariff on American Whiskey returns at 50%, it will bring this growth to a screeching halt and -- once again -- put American Whiskey exporters at a competitive disadvantage in our single largest export market,” the group said.

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