American distillers are warning consumers of an economic domino effect as other countries begin to place retaliatory tariffs on the U.S. beverage industry.
The European Union (EU) has delayed imposing its first retaliatory tariffs against the U.S. until mid-April, after President Donald Trump threatened a 25% tariff increase on all steel and aluminum imports earlier this month, according to Reuters.
The countermeasures of around $28 billion on U.S. goods, including a 50% tariff on American whiskey, were originally set to phase in on April 1, with a second wave to hit on April 13.
However, the EU decided on Thursday to delay imposing all retaliatory tariffs until mid-April, Reuters reported.
The outlet said the delay will give the EU more time to negotiate with the U.S. and review products subject to the new tax.
EU RETALIATES AGAINST TRUMP TARIFFS BY TARGETING $28B OF US GOODS, POTENTIALLY INCLUDING MEATS, TOOLS
Jameson and Powers whiskey on a shelf in a supermarket in Galway, Ireland, on Jan. 4, 2022. (Clodagh Kilcoyne/File Photo / Reuters)
“We are now considering to align the timing of the two sets of EU counter-measures so we can consult with member states on both lists simultaneously, and this would also give us extra time for negotiations with our American partners,” European Trade Commissioner Maros Sefcovic said in a hearing at the European Parliament on Thursday, according to Reuters.
American whiskey distillers praised the decision.
“This is a very positive development and gives U.S. distillers a glimmer of hope that a devastating 50% tariff on American whiskey can be averted,” Distilled Spirits Council president and CEO Chris Swonger said in a statement. “Over the past three years that these EU tariffs have been suspended, American Whiskey exports to the EU have soared, supporting jobs at U.S. distilleries as well as local farms.”
“We urge the EU and U.S. to reach an agreement that will return and safeguard zero-for-zero tariffs for spirits trade, benefitting the spirits and hospitality sectors,” Swonger said. “The spirits industry is a model for growth through fair and reciprocal trade at zero for zero tariffs.”
TRUMP’S 25% TARIFF INCREASE ON ALL STEEL, ALUMINUM IMPORTS TAKES EFFECT, PROMPTING RETALIATION FROM EUROPE
President Donald Trump announced that the U.S. may impose a 200% tariff on European alcohol in response to the EU announcing its retaliatory tariffs on American goods. (Getty Images / Getty Images)
After the EU first announced its countermeasures, Trump responded by threatening a 200% tariff on wine and other alcohol products from its European counterparts if the union were to proceed with its retaliatory tariffs.
“If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.,” Trump said in a post on Truth Social.
TRUMP THREATENS 200% TARIFF ON FRENCH WINE, OTHER EU ALCOHOL PRODUCTS
EU flags flutter in front of the European Central Bank headquarters in Frankfurt, Germany, on July 18, 2024. (Jana Rodenbusch/File Photo / Reuters)
Prime Minister Micheál Martin of Ireland, a major whiskey exporter, on Thursday said that delaying countermeasures was a sensible decision and would allow Europe to “wisely and strategically respond,” according to Reuters.
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Sefcovic indicated that little progress has been made in de-escalating the global trade war, the outlet reported.
“I don’t think that the U.S. thinking is in that direction,” Sefcovic said about proposals to lower import duties. “And currently they believe that the best way to do this is through the tariff policy. I hope that one day we will get to this discussion, but currently we are clearly not there.”
FOX Business’ Daniella Genovese and Reuters contributed to this report.
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