Irish whiskey, Italian prosecco, French Cognac, and other alcohol imports from the European Union will continue to incur tariffs for the time being, according to a White House official who requested anonymity. The official noted that these products were not included in the initial trade deal between the U.S. and the EU. The written draft of this trade agreement remains under negotiation and is not yet finalized, casting uncertainty over the future of the alcohol industry.
The absence of exemptions for these popular spirits does not bode well for many producers in Europe, as the American market represents a significant customer base for them. Last month, President Trump and Ursula von der Leyen, the president of the European Union’s executive branch, reached a verbal agreement to impose a 15 percent tariff on various products imported from EU member countries. However, officials from the European Union have consistently advocated for an exemption for alcohol products, expecting some items to be excluded from the tariffs.
As negotiations have progressed, the reality of no agreements regarding alcohol exemptions has become increasingly apparent. The document detailing the trade agreement is nearing completion, with the American side recently providing a draft outline to their European counterparts. Olof Gill, a spokesperson for the European Commission, confirmed that an edited version of this text has been sent back to Washington. Nevertheless, alcohol continues to be excluded from the discussions.
The implementation of a 15 percent tariff represents a significant shift from nearly three decades during which the alcohol industry faced no tariffs. This change comes despite previous optimism from industry groups about potential exemptions for wine and spirits. Mr. Gill emphasized that the European Commission remains committed to securing the maximum number of exemptions possible.
However, many European producers have warned that maintaining a 15 percent tariff could have devastating effects. The Federation of French Wine and Spirits Exporters has described the failure to secure exemptions as an “extremely violent shock” to the industry. The American liquor industry is also concerned about the impact of these tariffs on businesses and jobs. There are fears that the EU may retaliate with tariffs on American spirits, which has occurred in the past.
Chris Swonger, president and CEO of the Distilled Spirits Council of the United States, expressed concerns about the ramifications of a 15 percent tariff on EU spirits imports. He stated that this could increase pressure on U.S. restaurants and bars, which are already struggling with rising costs and slowing spirits sales.
Mary Taylor, owner of Mary Taylor Wine, voiced her frustration over the lack of progress toward lower tariffs. Having imported wines from Europe for years, she recently paid $40,000 in tariffs for a shipment, which she estimated accounted for one-third of her potential profits. Taylor acknowledged the desire to make American wines more competitive but emphasized that they cannot replace the unique offerings of European wines.
The ongoing negotiations between the U.S. and the EU regarding trade tariffs on alcohol imports remain uncertain. With key products like Irish whiskey, Italian prosecco, and French Cognac still facing tariffs, the potential implications for the alcohol industry on both sides of the Atlantic are significant. As discussions continue, industry leaders and producers will be watching closely for any developments that could impact their businesses.
