The lobbyists of the alcohols gathered in a private club Ritzy during a recent rainy evening in Brussels for Swill Cocktails with names like “Toast not prices” and is worried about the potential disaster confronted with their industry. Again.
Seven years ago, the spirits industry found itself a victim in a world trade war while President Trump sparked prices on American partners. The European Union retaliated with a series of prices which included a 25% burden on American whiskey – aimed at bringing Senator Mitch McConnell, a republican Kentucky and the head of the majority of the time. A series of Tit-for-tat prices Followed, striking the spirits of rum in cognac on both sides of the Atlantic.
The samples were suspended during the Biden administration, but with Mr. Trump back in office and trying to rewrite the rules of global trade, alcohol is back in the cross -fires.
The European Union suspended the prices in question in 2021 and extended this decision in 2023, but the hiatus only lasts on March 31. After that, prices increased by 50% will automatically apply to American whiskey, and the charges will reach a range of range range of 50% other goods, including motorcycles.
But it is the spirits industry that was the most vocal on the risks of samples. Industry leaders and handicraft distillers claim that taxes would decimate their export activity, in particular on growth markets such as Germany and France, while risking reprisals that would hit other types alcohol.
The bars imported additional bottles To try to get a shortage of trade war, the distilleries have put up expansion plans abroad on the ice and the chiefs of the industry clashed in Brussels, Washington and Rome, where Prime Minister Giorgia Meloni is Having become Mr. Trump’s bridge to Europe, to try to convince political decision -makers to help them avoid the imminent tariff pain.
However, there could be strategic reasons for the alcohol industry to be taken in negotiations. In fact, whiskey is a window with amber shades about the reasons why a trade war can be painful and in the way you can play.
The prices on consumer products such as bourbon generate news titles and reach specific geographies disproportionately, inflicting a lot of political pain at a limited cost. And because the European Union whiskey prices should launch automatically at the end of next month, they offer the continent a chance to put pressure on the United States without having to obtain a new political compromise, and without necessarily increase a trade conflict.
And at the moment, European leaders are trying to bring together any lever effect they can.
The block of 27 countries wants to avoid a large-scale trade war with the United States. Such a conflict damaged at a time when Europe’s economic growth is already stagnating, and the leaders of the continent are impatient to keep the United States to cooperate on other geopolitical priorities, such as the support of Ukraine while It fights against Russia.
The European Union has not yet provided details on how it will retaliate to new prices from the Trump administration – including 25% of samples from steel and aluminum announced on Monday and to start on 12 March. Thursday, President Trump directed his advisers to find new rate levels for the economies that will include the European Union, which seems likely to launch intense negotiations with governments around the world.
While EU officials debate their options, the alcohol industry looks at to see if whiskey prices will be kept or even accelerated.
“This industry should not be included in a commercial dispute,” said Chris R. Swonger, director general of the council distilled from the United States spirits, who recently made a trip to Italy and Belgium to speak to European leaders. “We are the poster for the best of free trade.”
Europe is not the only place where cocktails can mix with tariff negotiations. Mexican tequila trade and Canadian whiskey could be affected by the efforts of the United States to rewrite its trade relations with Mexico and Canada, although the prices between these nations were suspended until March.
Given the heavy backdrop, lobbies groups from the world’s industry have joined forces to argue that the spirits industry should be excluded from the multinational price to continue to exchange relentlessly – in particular between the United States and the European Union.
American whiskey exports to the European Union fell 20% In the year which followed the taxation of 25%tariffs, according to industry data. EU liqueur and cordial exports have also dropped strongly.
The decline had a relatively low economic impact – whiskey lost more than $ 100 million in sales from 2018 to 2019, but it is a rounding error in what was then an American economy of nearly 22 billions of Dollars. But the reverse has damaged the industry for years, and the threat of prices continued to hinder its expansion.
Victor Yarbrough, the director general of Brough Brothers Spirit Groups, had just started to ship Bourbon from his distillery to Louisville, in Kentucky, in Great Britain in 2019 when the first round of prices began to get started. The 25% price has made export not profitable.
Now he postpones plans to sell to French and German markets – something he hoped to do this summer.
“It is simply very difficult to make commercial decisions,” said Mr. Yarbrough.
He had hoped that his products, the bourbon of a connoisseur who has a taste for cherry and chocolate and a low -resistance option with a suspicion of apple, would do well on the European market. But he will have to wait to find out.
Mr. Yarbrough’s concerns are an example of how commercial disputes can affect certain American companies. Whiskey is the main The American distilled spirits export, representing more than two -thirds of all these sales on foreign markets in 2022 and 2023.
But the prices of tit-for-tat also cost consumers, including by making the products more expensive. Björn Lahmann, owner of Whiskyplaza in Hamburg, Germany, houses 1,000 open bottles of whiskey in an 18th century bar in the historic center of the city. His American selection is “so important” for classic cocktails like the Sazerac or the Old, he said.
If the cost of Bourbon and Rye increases considerably, he said, customers may be forced to obtain the cost or move on to something non-American.
The idea that prices cost all the parties involved was in fact one of the main discussion points in the European Union.
“Prices are taxes – bad for business, worse for consumers,” said Ursula von der Leyen, president of the European Commission, the executive branch of the European Union, in a press release Tuesday.
Europe’s strategy to deal with the United States has been to stick to this message while pushing to negotiate. Its leaders are trying to offer the victories of the Trump administration, as promising more gas purchases, something on which the president insisted.
But they also promised firm countermeasures in the event of negotiation failure. And this is where the targeted prices could come into play. The lobbyists are looking forward to details, but European leaders were waiting to reveal details.
“We do not know,” said Ulrich Adam, director general of the European group of the Eurprit Eur Alcohol lobby. “On the spirits, we speak with one voice: we want to maintain a trade without a price.”
