The European Union’s decision to reintroduce a 50% tariff on American Whiskey starting April 1 has sent shockwaves through the U.S. spirits industry.
For the past three years, the EU had suspended its 25% tariff, allowing American distillers to rebuild their presence in the European market. However, this new development raises concerns about the future of transatlantic spirits trade.
A Once-Thriving Trade Relationship
From 1997 to 2018, the U.S. and the EU maintained a zero-tariff agreement on spirits, fostering an era of growth that saw transatlantic trade surge by 450%. Bourbon and Tennessee Whiskey—both geographically protected products—benefited significantly from this arrangement. The reimposition of tariffs now threatens to disrupt this momentum, creating fresh challenges for American distillers and farmers alike.
Economic Impact and Industry Reactions
Chris Swonger, President and CEO of the Distilled Spirits Council, voiced strong opposition to the tariff hike, emphasizing that it undermines efforts to restore U.S. spirits exports to Europe. The impact is particularly concerning as the U.S. spirits industry faces domestic headwinds, including a slowdown in consumer demand.
History has already shown the consequences of such trade barriers. The EU’s initial 25% retaliatory tariff in 2018 led to a sharp decline in American Whiskey exports, falling 20% from USD 552 million in 2018 to USD 440 million in 2021. The suspension of tariffs brought a turnaround, with exports surging nearly 60% to USD 699 million in 2024. The reinstated tariff threatens to erase these gains, further straining American distillers reliant on the European market.
Calls for a Resolution
Industry leaders are urging both the U.S. and EU governments to negotiate a return to the zero-tariff model, which has historically benefited both parties. “A resolution that supports fair trade is essential,” Swonger stressed. Without intervention, the tariff increase could stifle growth, limit consumer choice, and disrupt the spirits supply chain on both sides of the Atlantic.
As the April 1 deadline approaches, all eyes are on policymakers to determine whether a compromise can be reached—or if American Whiskey will once again face an uphill battle in the European market.
Source: Vinetur