Your crash course in ... how proposed US tariffs could hit Irish whiskey

Irish whiskey could get dragged into a transatlantic trade dispute.

By Laura Roddy Reporter, Fora

A GROWING TASTE in America for Ireland’s finest drop of the pure has helped turn Irish whiskey exports into a major export success over the past few years. 

For producers, however, the US market could get a little more difficult. Earlier this week the US threatened tariffs on $4 billion worth of additional EU goods – including Irish whiskey – in a long-running dispute over aircraft subsidies.  

The Irish Whiskey Association (IWA) has said it will submit comments to the Office of the US Trade Representatives as it warned that tariffs could negatively impact investment and employment in both Ireland and the US. 

Whats going on? 

The IWA will submit the comments in response to the publication on Monday of a  “supplemental list” which adds 89 tariff subheadings – including Irish whiskey – to a list of EU products published earlier this year.

Tariffs on certain EU goods with a trade value of $21 billion were first proposed by the US in April over an ongoing trans-Atlantic dispute concerning aircraft subsidies. 

What caused the dispute? 

The trans-Atlantic tension might have ramped up in recent months, but the issue predates the Trump administration and is centered around an almost 15-year dispute between Washington and Brussels over claims of unfair subsidies placed on Airbus and Boeing aircraft. 

In its announcement yesterday the US said it will hold a public consultation period up to the 5 August for parties to submit comments on the list of proposed products. 

The World Trade Organization (WTO) is expected to rule on the US sanction request later this year. 

How could it affect Irish Whiskey?

The Irish Whiskey Association said it opposes the potential imposition of tariffs which “harms distillers and businesses in both Ireland and the US”.

According to the body, the tariffs would “negatively impact investment and employment in both jurisdictions”. 

“We urge both sides to continue to strive to achieve a mutually acceptable solution to this issue and to avoid imposing barriers to trade which will ultimately adversely impact businesses and consumers on both sides of the Atlantic,” the organisation said. 

Denise Murphy, the sector manager for alcohol beverages at Bord Bia, told Fora that in 2018 around 4.5 million cases of Irish whiskey were exported to the US from Ireland. 

“This is valuable business that represents 43% of overall Republic of Ireland whiskey exports,” she said. 

According to Murphy if the tariffs are approved they will have a negative impact on that business. At the moment it is hard to quantify the impact of the tariffs until the level considered is published, she added. 

Sales of Irish whiskey did well last year in the US, rising 13.5% despite a decline in alcohol consumption in the country – according to research by International Wine and Spirit. 

According to the latest CSO figures Irish whiskey exports increased by 13% from €578.78 million in 2017 to €654 million last year.

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