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US, EU end tariffs on Kentucky bourbon, whiskey | News

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LOUISVILLE, Ky. (WDRB) –– The U.S. and European Union have agreed to end tariffs on bourbon and whiskey under a new agreement. 

The agreement was first announced Saturday in Rome by U.S. national security adviser Jake Sullivan, U.S. Trade Representative Katherine Tai and U.S. Commerce Secretary Gina Raimondo. They said the Article 232 tariffs, as they are known, would not be removed entirely but that some quantity of European steel and aluminum will be allowed to enter the U.S. tariff-free.

In return for Europe dropping its retaliatory tariffs, the U.S. would also ensure “that all steel entering the U.S. via Europe is produced entirely in Europe,” Raimondo said.

The easing of the tariffs is a key step in unwinding one of Donald Trump’s legacies as president as Biden has tried to reset U.S. relations with Europe.

The Trump administration had placed taxes on EU steel and aluminum in 2018, claiming the foreign products made by American allies were a threat to U.S. national security.

Europeans and other allies were outraged by Trump’s use of the Article 232 section of U.S. trade law to justify the tariffs, leading many to impose counter-tariffs on U.S.-made motorcycles, bourbon, peanut butter and jeans and hundreds of other items.

The back-and-forth hurt European producers and raised steel costs for American companies. The tariffs also did not achieve Trump’s stated goal of creating jobs at steel mills. The Bureau of Labor Statistics shows that jobs in the manufacturing of primary metals did rise slightly, to as much as 389,100 in 2019. But mills shed workers during the pandemic, and employment in the sector is roughly half of what it was in 1990.

The European Union took steps in May to improve relations. On some retaliatory tariffs, the EU temporarily suspended planned increases. This meant that American whiskey faced a 25% tax in Europe, instead of a planned 50% tax. The two sides faced a December deadline to avoid the higher tax rate.

The summit’s host, Italian Premier Mario Draghi, in a statement Saturday night expressed “great satisfaction “ for the tariff accord. The decision “confirms the further reinforcement underway of the already close trans-Atlantic relations and the progressive overcoming of the protectionism of the last years,” he said.

The announcement also was welcomed by Chris Swonger, president and CEO of Distilled Spirits Council of the United States, after what he called “three very difficult years of sagging American whiskey exports.”

“Lifting this tariff burden on American whiskeys not only boosts U.S. distillers and farmers, it also supports the recovery of EU restaurants, bars and distilleries hit hard by the pandemic,” Swonger said.

Kentucky Gov. Andy Beshear said the announcement to remove tariffs on Kentucky bourbon is “great news.” 

“Bourbon is a $8.6 billion industry that provides 20,000 jobs to Kentuckians,” the governor tweeted. “Thank you to @SecRaimondo and the Biden administration and all those who helped make this win a reality for the commonwealth.”

Brown-Forman also applauded the the announcement on Sunday. 

“Brown-Forman looks forward to the return of a level playing field on January 1, 2022, and continued international growth for American Whiskey,” President and Chief Executive Officer at Brown-Forman Corporation Lawson Whiting said. “We hope a similar outcome can soon be achieved between the U.S. and the UK.” 

Copyright 2021 WDRB Media. All Rights Reserved. The Associated Press contributed to this report. 



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