American whiskey producers are once again swept up in a trade dispute that has unfurled pricey tariffs on their exports to Europe.
At midnight on Tuesday, the U.S. began imposing 25% tariffs on all steel and aluminum imports from all trading partners, prompting retaliatory measures from the EU, announced today. New duties on about $28 billion worth of U.S. industrial and farm products will include steel and aluminum products, as well as textiles, agricultural goods and home appliances.
Signature American products such as motorcycles, peanut butter, jeans and bourbon will also be hit, as they were during President Donald Trump’s first term in response to aluminum and steel tariffs in 2018.
The imposition of the 2018 tariffs took a hit on the U.S. whiskey industry, with exports to the EU – its largest international market – dipping 20% from $552 million in 2018 to $440 million in 2021, according to the Distilled Spirits Council of the United States (DISCUS). The Biden administration later suspended the steel and aluminum tariffs, and in October 2022 the EU agreed to suspend the 25% tariff on American whiskeys for two years starting January 1, 2022. That truce is expected to expire on April 1, with 50% duties on American whiskeys slated to return.
A second wave of tariffs on other U.S. spirits, wine and beer is possible as well. In addition to the 2018-era tariffs scheduled to return April 1, the European Commission is putting forward a package of new countermeasures on U.S. exports that would come into force mid-April, following consultation of Member States and stakeholders. The full list of products the Commission is proposing to target as part of that second wave includes non-alcoholic beverages, wines, several spirits categories such as gin, liqueurs and cordials, as well as beer. The public consultation on the list is open from Wednesday until March 26.
“Reimposing these debilitating tariffs at a time when the spirits industry continues to face a slowdown in U.S. marketplace will further curtail growth and negatively impact distillers and farmers in states across the country,” said Chris Swonger, DISCUS president and CEO, in a statement.
During the last three years, American Whiskey exports to the EU have rebounded, surging nearly 60%, climbing from $439 million in 2021 to $699 million in 2024. Craft spirit producers, however, have struggled to regain their footing in EU markets.
The trade association is urging the U.S. and EU governments to come to a resolution that gets the spirits industry back to “zero-for-zero tariffs.”
The steel and aluminum tariffs could also impact important materials for the larger beverage industry. President Trump threatened a 50% tariff on Canadian steel and aluminum, but backed off Wednesday morning after Ontario suspended a move to impose a 25% surcharge on electricity exports to some U.S. states. The tariff, as of now, will remain at 25%, which has prompted Canadian tariffs on about $21 billion of American goods.