Overseas tariffs sour US whiskey exports

Rye whiskeys are displayed in New York November 18, 2015. With levies from Canada, Mexico, China and the EU, collective whiskey exports from 37 US states fell by 8 per cent between July and November last year. — Picture by Pablo Enriquez/The New York Times
Rye whiskeys are displayed in New York November 18, 2015. With levies from Canada, Mexico, China and the EU, collective whiskey exports from 37 US states fell by 8 per cent between July and November last year. — Picture by Pablo Enriquez/The New York Times

NEW YORK, Feb 13 — US whiskey makers are feeling the pain after their major overseas markets imposed hefty duties on their liquor in retaliation against President Donald Trump’s tariffs on aluminium imports.

US global whiskey exports, which include rye and bourbons, recorded a nifty 28 per cent year-over-year increase in the first six months 2018, the Distilled Spirits Council said yesterday.

But once levies from Canada, Mexico, China and the European Union took effect, the collective whiskey exports from 37 US states fell by 8 per cent in the period from July to November last year, compared with the same five months in 2017, according to the Washington-based industry trade group.

The tariff-induced drop wiped out the overseas sales gain the industry had enjoyed in the first half of 2018, the group’s data showed.

“Tariffs are starting to have a negative effect on exports,” Christine LoCascio, the group’s senior vice president of international trade, told a press conference. “Many of the small distillers have felt the effect on day one.”

In 2017, American whiskey producers exported US$1.1 billion (RM4.4 billion) worth of their products. Nearly 60 per cent was shipped to the EU, 12 per cent to Canada and the rest to other countries, including China.

On the other hand, the distillers fared better at home.

In 2018, American whiskey rang up a 6.6 per cent increase in revenues from a year earlier to US$3.6 billion, the group’s data showed.

In the wake of the EU’s imposing 25 per cent tariffs last June, US whiskey exports fell 8.7 per cent in the following five months, compared with the same period in 2017.

Canada’s 10 per cent duties that took effect on July 1 resulted in an 8.3 per cent sales decline in that country for American whiskey producers in the July-November period compared with the same period a year earlier, the group said. — Reuters