/American Whiskey Could Soon Be Hit With a 50% Tax When Sent to Europe – Robb Report

American Whiskey Could Soon Be Hit With a 50% Tax When Sent to Europe – Robb Report


Expats wanting a taste of the United States while abroad probably won’t be finding it in bourbon or rye.

American whiskey is staring down a 50 percent tax when sent to Europe, which could hurt the stateside spirits industry, The Wall Street Journal reported on Monday. Set to take effect next year, the tariff is a retaliatory measure from the European Union for U.S. taxes on European steel and aluminum. Distilleries are caught in the middle of the dispute, even though it has nothing to do with their products.

“We’re just collateral damage,” Brooke Glover of West Virginia’s Swilled Dog distillery told the WSJ.

Back in 2018, then-President Donald Trump imposed the steel and aluminum tariffs, causing the EU to respond with its own taxes on iconic American goods, such as Levi’s jeans and Harley-Davidson motorcycles. Initially, American whiskey was taxed at 25 percent, with the tariff suspended a couple of years ago thanks to an agreement between the U.S. and the EU. The tax is supposed to go back into effect in 2024, though, doubled to a whopping 50 percent.

The U.S. is trying to put the tariff on hold once again with another two-year extension, sources told The Journal. But so far, no agreement has been made, putting the distilleries into a bind.

“That there’s a significant chance the tariffs could come back is really enough to deter you from wanting to make investments in these foreign markets,” Jeff Quint, the CEO of Iowa’s Cedar Ridge Distillery, told the newspaper. “Nobody’s going to make a significant investment in teaching the world about bourbon until we know these tariffs have been eliminated.”

Since the tariffs were initially introduced, some distilleries have opted out of sending their goods to Europe. When faced with the 25 percent tax, EU exports fell 20 percent, from $552 million to $440 million. Since the suspension, though, exports have skyrocketed above the pre-tariff level, according to data from the Distilled Spirits Council of the United States shared with the WSJ.

The trend isn’t likely to hold, however, if the 50 percent tariff is enacted in the new year: It “would be an utter disaster for the American whiskey industry,” Chris Swonger, the president of DISCUS, told the outlet.

It would also be a disaster for Europeans who love American whiskey.





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