A massive 200 per cent tariff on Irish whiskey exports to the US would deal a “very serious blow” to the industry here, whiskey entrepreneur John Teeling has warned.
Responding to US president Donald Trump’s latest tariff threat, levelled at European alcohol exports, Mr Teeling described the proposed tax as “inordinately high” and one that was likely to have a dramatic impact on sales of Irish whiskey in the US.
“A tariff of that rate could not be absorbed by producers or importers...so prices would have to go up which would have serious impact on sales,” he said.
More than €800 million of Irish drink exports to the US, including €450 million of whiskey exports, are now in the firing line as a result of Mr Trump’s latest tariff threat.
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The US president in a social media post on Thursday said he would move forward with the import duties if the EU doesn’t repeal a tax on US whiskey.
As part of its retaliatory measures against US steel and aluminium tariffs, the EU on Wednesday announced tariffs on €26 billion worth of US goods, including tariffs on US whiskey and Kentucky bourbon.
“If this Tariff is not removed immediately, the U.S. will shortly place a 200 per cent Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES,” Trump said of the move which would likely include levies on whiskey. “This will be great for the Wine and Champagne businesses in the U.S.”
Irish whiskey industry representatives were in Washington this week as part of the St Patrick’s Day events and to make the case for the industry as Europe and the US inch closer to a trade war.
Irish Whiskey Association director Eoin Ó Catháin said he was disappointed by the announcement and concerned that “it had come to this”.
“The imposition of tariffs will impact on our businesses and our consumers. Having our sector implicated in this dispute puts jobs, investments and businesses at risk and has the potential to be devastating for Irish whiskey,” he said.
Mr Ó Catháin insisted there was still time for dialogue as there was a brief window before the tariffs are implemented.
Shares in European makers of alcoholic beverages fell with LVMH, which owns champagne houses Moët & Chandon and Veuve Clicquot, down as much as 2.2 per cent. Cognac producer Remy Cointreau dropped 4.5 per cent and spirits maker Pernod Ricard declined 3.6 per cent.
Mr Trump also pledged another round of tariffs in just three weeks, saying he will begin rolling out reciprocal duties. The White House plans to apply an across-the-board rate to each country, based on a calculation of their own tariffs and other trade barriers such as digital taxes or value-added levies.
That threatens to further ignite the trade war, forcing countries to retaliate in ways that could spur Mr Trump to add more levies of his own under the mantle of reciprocity. The president is also pledging separate sectoral tariffs on industries including autos, lumber, semiconductors, pharmaceutical drugs and copper.
The president has enacted his sweeping tariff agenda in a piecemeal fashion, a strategy that has been punctuated by uncertainty, including delays, reversals and changes in direction. Mr Trump on Tuesday threatened to double a forthcoming tariff on Canada and backed down hours later when Ontario paused an export surcharge on electricity.
The use of tariffs as leverage in economic and geopolitical disputes is weighing on markets. The S&P 500 Index has dropped nearly 10 per cent from a February high, raising fears of a recession. On Wednesday, US markets made some gains after weeks of turmoil and losses.
Mr Trump – who during his first term, repeatedly touted stock surges as validation of his policies – has shrugged off the fallout, saying this week the selloff was a buying opportunity and necessary to remake American industry and supply chains. Support for his tariff barrage is tepid at best, with many industry groups urging exemptions and economists warning of cascading fallout across the economy.
