Congress Bourbon Caucus asks US to get EU spirit duties ended

Lawmakers from U.S. whiskey-producing states asked the Biden administration to negotiate an immediate end to all tariffs on American spirits, weeks before European Union and U.K. duties on American bourbon are set to double.

“Absent urgent action to fully suspend these tariffs, American whiskey will remain at a serious competitive disadvantage in our two most important export markets, and we fear many craft distillers will be put out of business,” lawmakers from the Congressional Bourbon Caucus said in a letter Tuesday to U.S. Trade Representative Katherine Tai.

The whiskey industry was hit with 25% duties on shipments to the EU in June 2018. They are a retaliation against steel and aluminum tariffs former president Donald Trump imposed in the same year, citing national-security concerns to justify his move. Some countries, including Brazil and South Korea, negotiated deals to avoid the levies, and Trump dropped the duty for imports from Canada and Mexico. But the tariffs still apply for much of world, including the EU.

The whiskey duties—which are set to double on June 1—show how unrelated industries get caught up in trade wars when countries look to maximize the political impact of reciprocal levies. The tariffs particularly hit Kentucky, the biggest bourbon-producing state and home of then Senate Majority Leader and Trump ally Mitch McConnell.

The letter by 50 Congress members led by Kentucky Democratic Representative John Yarmuth and Republican Andy Barr said craft distillers across the U.S. are suffering from the tariffs and the pandemic. Forty-one percent of sales of the more than 2,000 distillers have evaporated, and 31% of their employees have been furloughed since the start of the outbreak, they said.

The doubling of the EU’s tariff on June 1 will cause irreparable harm to once-booming exports, said Lisa Hawkins, senior vice president of public affairs at the Distilled Spirits Council.

While the administration is making important progress on the trade front, American whiskey “can’t be left behind,” she said.