The American whiskey industry can now breathe a sigh of relief. The UK has agreed to remove the “crippling” 25 percent tariffs on U.S. whiskey imports in June, putting an end to the ongoing trade spat over steel and aluminum imports. Two months of talks between the two allies culminated in the U.S. Commerce Secretary Raimondo announcing the resumption of tariff free access for UK steel and aluminum exporters to the U.S., and the UK Trade minister confirming the removal of tariffs on whiskey to the UK. The new measures take effect on June 1.
The Distilled Spirits Council of the United States (DISCUS) reports that since the addition of the 25 percent retaliatory tariff, U.S. exports to the UK – the fourth largest market for American whiskeys – declined by 42 percent, from $150 million to $88 million (2018-2021). Increased tariffs were a major component of the Trump administration’s trade policy, with wine and spirits, including the American whiskey industry, bearing the brunt of the dispute.
DISCUS president and CEO Chris Swonger said that distillers throughout the United States would be cheering the end of this long tariff “nightmare.”
“With the removal of the UK’s debilitating retaliatory tariffs on American Whiskey exports, U.S. distillers are ready to fire up the stills and resume sharing the special taste, heritage and quality of America’s native spirit with our UK consumers,” he said.
“From day one, the Biden administration made it a priority to reset the relationship with the EU and UK, two of our most important allies and trading partners. The successful resolution of two separate and complicated trade disputes that saddled distilled spirits on both sides of the Atlantic with tariffs could not have been possible without the strong leadership of Secretary Raimondo, Ambassador Tai and their teams at the Departments of Commerce and Office of the United States Trade Representative,” he continued in a prepared statement.
“We also appreciate the longstanding support from the U.S. Department of Agriculture and Secretary Vilsack for highlighting the negative impact retaliatory tariffs have on value-added agriculture exports, including distilled spirits. American whiskey producers have a close relationship with their farmer partners, who are also hailing an end to these devastating tariffs.”
Miles Beale, chief executive of The Wine and Spirit Trade Association, also welcomed the news, saying it would provide great encouragement to UK spirits importers, and be a significant boost to the UK hospitality industry as it recovers from the pandemic.
American whiskey exports started rebounding in 2021, no doubt in part because of restrictions easing from the pandemic. Industry experts say distillers have more ground to make up to fully recover. According to another report from the Distilled Spirits Council, exports of bourbon, Tennessee whiskey and rye whiskey reached $975 million in 2021, up 15 percent from the prior year. Last year’s total was still down 18 percent from the record high – about $1.2 billion in 2018.