Lawmakers Urge Biden Intervention to Prevent Steep Tariff Increase on US Liquor

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A group of bipartisan lawmakers on Capitol Hill are working harder to stop a whopping 50% tax jump on American booze shipments to Europe as January 1 draws near. 

The impending tariff surge is a residual consequence of the trade disputes initiated by President Donald Trump in 2018, involving heavy tariffs on European steel and aluminum imports to boost American manufacturing.

In retaliation, the European Union imposed tariffs on various American products, including whiskey and spirits, which have been subject to a temporary suspension agreement that’s set to expire on January 1, 2024. If negotiations fail to yield an agreement before the deadline, the tariff will skyrocket from its current level to a staggering 50%.

A bipartisan coalition of senators, spearheaded by Senators Tim Kaine, Mark Warner, and Minority Leader Mitch McConnell, underscored the substantial influence of retaliatory tariffs on the United States economy, particularly emphasizing the detrimental consequences faced by the spirits industry.

They underscored that between 2018 and 2021, American whiskey exports plummeted by 20%, from $702 million to $440 million, due to these tariffs.

Lawmakers Worried About Broad Impact of Retaliatory Tariffs

lawmakers-urge-biden-intervention-to-prevent-steep-tariff-increase-on-us-liquor
A group of bipartisan lawmakers on Capitol Hill are working harder to stop a whopping 50% tax jump on American booze shipments to Europe as January 1 draws near.

The lawmakers contend that the suspension of tariffs in 2022 led to a resurgence in American spirits exports, surpassing pre-tariff levels from 2017. 

However, the potential reinstatement of tariffs could further cripple industries, particularly those encompassing small, locally-owned businesses, including retailers, grocers, importers, and distributors, exacerbating the impact of the COVID-19 pandemic.

A story compared the situation to a brawl over whiskey in a bar and emphasized the far-reaching effects of retaliatory tariffs on several American small firms that were still being hit by EU duties, such as orange juice, Levi’s jeans, and Harley-Davidson motorcycles.

The Distilled Spirits Council of the United States and over 100 trade organizations expressed their worries to lawmakers on the looming uncertainty and instability over industries unrelated to the steel and aluminum dispute in response to the potential tariff rise. 

They estimated that the reimposition of duties could amount to a substantial loss exceeding $1.43 billion, impacting various products, ingredients, and raw materials involved in the dispute.

The collective call from lawmakers and trade associations underscores the urgency of resolving this trade conflict to prevent further economic repercussions for both American and European markets.

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