The US and EU are fighting over tariffs – and whiskey is caught in the crossfire

Starting next year, US tourists and expats wanting a taste of home while abroad probably won’t be turning to whiskey.

The $5.4 billion US liquor industry is staring down an upcoming 50% tax when American-made whiskey is sent to Europe, potentially affecting $566 million worth of EU-bound liquor each year.

How we got here: In 2018, then-President Donald Trump imposed tariffs on steel and aluminum coming from the EU in an attempt to bolster domestic industry, which had faltered in recent years. The tariffs then caused the EU to impose its own retaliatory taxes on iconic American goods, including Levi’s jeans, Harley-Davidson motorcycles, orange juice, peanut butter, and whiskey.

• US whiskey was initially taxed at 25%, leading to a 20% drop in exports to the EU, though the tariff was suspended in 2022 as part of an agreement in which the US lifted its EU steel aluminum taxes for two years.
• Since that tariff’s suspension, the US whiskey industry has sprung back to life. American exports to the EU jumped 118% in the first half of 2023 compared to the same period in 2022.

👀 Looking ahead… The EU’s tax on American whiskey is scheduled to resume starting Jan. 1, 2024 – and it will be doubled to 50% when it does.

The US is currently trying to negotiate another two-year pause in the tariff, but an agreement hasn’t been reached thus far, per the WSJ. However, a senior EU official last month said the bloc is aiming to resolve the ongoing tariff dispute by year-end.