Irish Whiskey Tries to Dodge Cross-hairs as US Cleared to Impose Tariffs on $7.5bn of EU Goods

As many as you will know, the Trump administration and the European Union have been in a series of disputes over trade relations and anti-competition practices on both sides of the Atlantic, which has led to the EU and the US coming head to head in a retaliatory tariff stand off that has seen US Whiskeys hit with increased tariffs in the EU and Irish Whiskey firmly in the cross-hairs of the US’ next set of tariffs.

Initially the EU placed tariffs on a number of US goods imported into the European Union as a response to President Trump’s protectionist steel and aluminium importation tariffs in 2018. These tariffs amounted to duties on €2.8bn of US goods, which unfortunately also included US whiskey, which has witnessed a double-digit decline since the implementation of these tariffs.

The dispute escalated and has now encapsulated a 15 year dispute between airline manufacturers Airbus (in the EU) and Boeing (in the US), over who benefits more from illegal subsidies that they both receive from their respective federal governments.

In response to these subsidies, the US sought, through the WTO, to impose tariffs on $11bn of European goods, which would see prices rise in the US for all targeted European goods. Irish whiskey unfortunately found itself on this targeted list, as a response to the US whiskey manufacturers being affected in EU tariffs.

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This morning, the WTO ruled that the US is entitled to levy tariffs on $7.5bn of the requested $11bn against European goods. the European Commissioner for Trade, Cecilia Malmstrom, said in a statement that any fresh tariffs levied by the United States would be “short-sighted and counterproductive.” She appealed for both governments to come together and “impose mutual countermeasures” instead of descending into to a tariff war that would only serve to harm people on both sides of the Atlantic.

This ruling could stand to be a large threat to the Irish whiskey industry as it has crosshairs firmly planted on its back by the US administration. The United States is Irish Whiskey’s most important market with over 4.5 million 9 litre cases being sold in the market annually.

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New tariffs against the spirit of Ireland could be detrimental for young fledgling Irish whiskey brands who are investing in the US market, who will not be able to adsorb the implementation of a suspected 25% tariff on their products. If the producer cannot absorb the tariff the new importation price will ultimately impact the consumer with increased prices on shelves, leading to a natural economic reduction in sales when prices increase.

We now await an announcement from Trump’s administration in regards to what goods they will focus on, for their $7.5bn in tariffs. An announcement is expected today, now that the WTO has ruled in favour of US tariffs. A whole industry is keeping its fingers crossed that they will not be impacted in this continued tariff escalation between the two Federal Governments. We will update once the tariffs have been announced.

Once the WTO Dispute Settlement Body has approved the proposed US tariffs, they will be imposed after a ten day close out period.

List of other possible tariff target goods:

Aeroplanes & parts Automotive Imports Wines Pastas
Olives Waffles Luxury Leather Goods Pork Products
Dairy Products Fruit & juices Coffee Irish Cream Liqueur


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