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Us Whiskey Traders Struggle After Year of EU Taxes

When Europe’s duties on U.S. whiskey hit in June 2018, craft distillery Mountain Laurel Spirits LLC lost 10% of its sales in a single day as its European distributor stopped buying its award-winning Dad’s Hat Pennsylvania Rye Whiskey.

Overseas governments subject to U.S. President Donald Trump’s trade duties have targeted American distilleries and their bourbon and rye whiskeys for revenge. The sector fears new tariffs into account by the U.S. government might lead to even higher taxes on their products in Europe.

U.S. whiskey exporters are struggling to recover lost sales after deliveries to Europe fell 21% between June 2018 and 2019, in response to data from the Distilled Spirits Council, a U.S. trade group.

In the 12 months before the duties hit, the US shipped $757 million of rye and bourbon. From July 2018 to June 2019, exports were $597 million. Exports are a sizeable chunk of sales the U.S. whiskey trade, which produced $3.6 billion in revenue in 2018.

The Distilled Spirits Council said that 63% of U.S. whiskey exports had faced retaliatory duties from the European Union, Turkey, China, Canada, and Mexico. The EU currently imposes 25% tariffs on U.S. whiskey.

The U.S. Trade Consultant’s office is preparing to levy additional duties of up to 100% on $1.8 billion worth of European spirits and wine in response to illegal European aid to plan manufacturer Airbus, the newest development in a 15-year-long trade war between Europe and the US.

The group said that at least 11,200 to 78,600 jobs could be lost in the beverage, alcohol and hospitality sectors, which currently employ 2.4 million Americans if the EU-U.S.-battle worsened.

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