EU spares bourbon in 25% tariffs on some US goods in metals spat
Europe is in the process of responding to new Trump administration tariffs
[BRUSSELS/NEW YORK] The European Union has dropped a planned 50 per cent retaliatory tariff on American whisky as it’s proposing 25 per cent tariffs on a selection of US goods in retaliation for President Donald Trump’s decision last month to put levies on aluminium and steel imports
Several member states had pushed for whisky to be excluded in an effort to spare European wine and champagne producers from facing 200 per cent tariffs threatened by Trump as retaliation.
The European Commission, the bloc’s executive arm, shared a document, seen by Bloomberg, listing dozens of product categories it plans to target, but a preliminary assessment of the list showed that bourbon was not included.
The list of targeted products is diverse and includes diamonds, motorcycles, pleasure boats, household appliances, safety glass, playing cards, tobacco, poultry and other agricultural products. Most face a 25 per cent tariff, but a few would be hit with a 10 per cent rate.
EU member states aim to approve the plan later this week and it would enter into force on Apr 15, although most of the duties would not be collected until mid-May. Tariffs on soybeans and several kinds of nuts would enter into force on Dec 1.
As the EU continues to debate how to respond to Trump’s announcement of a broader 20 per cent tariff on imports from the bloc, it’s trying to carefully calibrate its response to his earlier metals tariffs. Officials have said they want to leave room for a negotiation, but also want to show resolve.
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The end of the whisky tariff would inspire sighs of relief from American distillers. Europe is the industry’s biggest export market, and some firms had been scrambling to ship as much product there as possible before mid-April, when the tariffs had been set to take effect.
American whisky was one of billions in US goods previously targeted by the European Commission, many politically sensitive goods in Republican-led states.
But EU wine and champagne producers may not be able to celebrate just yet. Trump had threatened to leverage 200 per cent tariffs on EU alcohol importers if the EU followed through with its whisky tariffs. Still, Trump has not yet commented on the implications of the EU’s decision on American tariff policies.
The US-EU trade fight dates back to 2018, when Trump imposed hefty tariffs on steel and aluminium imports. In response, the EU slapped a 25 per cent tariff on American whisky. That tariff was suspended in late 2021 as part of negotiations by former president Joe Biden, and since then, American whisky has entered the EU tariff-free.
The 50 per cent tariff, if it had taken effect, would have substantially affected US distiller Brown-Forman Corp, the maker of Jack Daniel’s, as the EU accounts for about 20 per cent of the company’s net sales.
Europe is in the process of responding to new Trump administration tariffs. EU trade ministers met in Luxembourg to mull negotiation strategies and prepare potential countermeasures.
After discussions with member states and stakeholders in recent weeks, the EU is now targeting levies on billions of euros in goods.
The focus on whisky became a line of pushback against Trump’s trade policy by Senators Mitch McConnell and Rand Paul, both Republicans from Kentucky. Bourbon is a major export for their state.
“Broad-based tariffs could have long-term consequences right in our backyard,” McConnell wrote in a February op-ed. The senator urged readers to consider the state’s “hardworking Kentuckians who craft 95 per cent of the world’s bourbon”.
Reuters earlier reported the 25 per cent tariffs plan. BLOOMBERG
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