American Distillers Face a Double-Shot of Tariffs in June. Will Biden Save Them?
Before the tariffs hit, Sonat Birnecker Hart’s Chicago-based distillery was seeing exports to Europe and the United Kingdom grow by about 25 percent annually.
It’s been a different story for KOVAL Distillery recently, with sales across the Atlantic down 60 percent since whiskey got caught up in a trade war. “This erodes years’ worth of effort by our team to get onto European shelves,” Hart writes in an op-ed for The Washington Post. “The longer we’re off these shelves, the harder it will be to get back on them.”
The tariffs that have wrecked Hart’s ability to grow her brand overseas were imposed in retaliation to the Trump administration’s tariffs on steel and aluminum imported from Europe. Since June 2018, the European Union has applied 25 percent import taxes on American whiskey and a variety of American agricultural goods including corn, orange juice, peanut butter, and tobacco products.
Combined with the economic impact of the COVID-19 pandemic, the tariffs have forced Hart to scale back significantly: closing the distillery’s tasting room and laying off employees. Across the industry as a whole, American whiskey exports to European countries have declined by 53 percent since the tariffs were imposed, according to trade data tracked by the Distilled Spirits Council of the United States (DISCUS), an industry group.
And now another major hurdle looms on the horizon. Unless the U.S. reaches a deal with Europe to roll back the Trump-era tariffs before June 1, the European tariffs will automatically double from 25 percent to 50 percent.
That’s one of the first significant deadlines looming for the Biden administration as it navigates (and at least partially embraces) the haphazard trade environment left by Trump. When the Senate convenes next week for a confirmation hearing on Biden’s pick to
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