Those figures are only the start of the damage the Distilled Spirits Council sees if the European Union, Canada, Turkey and/or China begin retaliating against U.S. distilled spirts products in response to U.S. tariffs on steel and aluminum imports.
The Council estimates the value of U.S. spirits exports to these markets are $759 million a year. Retaliatory tariffs would “severely harm producers, U.S. farmers, distribution and logistics providers as well as other input providers such as glass and other packaging suppliers,” the Council said.
The comments came in a letter handed to Commerce Secretary Wilbur Ross today.
The U.S. distilled spirits sector directly and indirectly employs 1.5 million people.
The letter, signed by Clarkson Hine, interim president, notes that over the past two decades, U.S. spirits exports have increased to $1.64 billion from $575 million, an increase of 185%.
“American Whiskeys, including Bourbon, Tennessee Whiskey and American Rye Whiskeys, are a key component of this export success, having increased” to $1.13 billion in 2017 from $290 million in 1997, the letter says.
The letter details the projected damage from the retaliatory tariffs:
- European Union – 25% retaliatory tariff, effective June 20. Total U.S. spirits exports to the EU in 2017 were $789 million; U.S. whiskey accounted for 85% of that total, or $667 million.
- Canada – 10% in response to steel and aluminum tariffs, effective July 1. In 2017, total U.S. whiskey exports to Canada were $48.7 million.
- Mexico – 25%, effective June 5. In 2017, U.S. whiskey exports totaled $13.4 million.
- Turkey – 40% on all U.S. distilled spirits in response to steel and aluminum tariffs, effective June 21. Total Turkish imports of U.S. spirits in 2017 was $21 million, of which $20.2 million was whiskey.
- China – Retaliatory tariffs of 25% on U.S. whiskey. “America spirits exports to China have grown almost 1,200%” since 2001, when China joined the World Trade Organization to $12.8 million, of which $8.9 million was whiskey.