On Thursday, August 21, United States and European Union (EU) officials announced the United States-European Union framework agreement on reciprocal, fair and balanced trade. According to the AP, the document was described as a political commitment rather than a legally binding treaty.
The agreement includes a 15% import tax on most European goods exported to the United States. Notably, spirits, which have been exempt from tariffs on both sides since 1997, were not excluded from the blanket 15% import tax on goods. This means higher prices could be on the horizon for products like Scotch whiskey, Irish whiskey, French cognac, Italian wines, and more.
There seems like there is still room for negotiation on certain EU imported goods categories, however, including spirits. It was widely reported that the EU's Chief Trade Negotiator Maros Sefcovic said that "doors are not closed forever" on that issue and that talks will hopefully continue.
History has shown that spirits tariffs do not bode well for the market. The Distilled Spirits Council of the United States (DISCUS) said that when the EU's retaliatory tariff was imposed in 2018, American Whiskey exports to the EU plunged 20%, from $552 million to $440 million (2018-2021). Since the tariffs were suspended in 2022, American Whiskey exports to the EU surged nearly 60%, climbing from $439 million in 2021 to $699 million in 2024.
Economic analysis from DISCUS predicts that a 15% tariff on EU spirits imported to the U.S. could result in an estimated retail sales loss of over $1 billion and more than 12,000 job losses.
“This is an unsteady time for the U.S. hospitality industry with sales of spirits facing a slowdown and rising food and labor costs," said Distilled Spirits Council President and CEO Chris Swonger, in a statement issued in response to the new tariff agreement. "These new higher tariffs on EU spirits products will further compound the challenges facing restaurants and bars nationwide."
A six-month suspension of retaliatory tariffs on U.S. imported spirits into the EU was announced on August 5th and will remain in place until February 5, 2026. "We commend the administration for safeguarding U.S. spirits from tariffs in the short term, but without a permanent return to zero-for-zero tariffs on spirits, American distillers do not have the certainty to plan for future export and job growth without the fear of retaliatory tariffs returning," said Swonger in the statement.
Swonger concluded the statement by vowing to continue to urge for zero-for-zero tariffs, “We are determined to continue engaging with the Trump administration to urge for additional negotiations with the EU to get our special spirits industry back to zero-for-zero tariffs, which will benefit consumers and protect American jobs across the agriculture, manufacturing, and hospitality industries.”
Find all of our coverage on tariffs here.
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