New Trade Deal Means Good News For Bourbon Lovers In The UK
British bourbon lovers caught a big break this week as the U.K. government finalized a deal to end a Trump-era trade tariff that majorly increased the price of some imported American goods.
According to Reuters, commerce representatives for the United States and United Kingdom just reached an agreement to end a four-year trade conflict that drove up the cost of a numerous American products across the U.K. The bourbon tariff was first imposed by the European Union in 2018, after the Trump administration imposed major trade tariffs on the E.U. in order to protect U.S. steel and aluminum producers from the threat of subsidized imports.
While the center of the trade dispute revolved around the steel and aluminum industries, the E.U. implemented a steep tariff on the import of bourbon and other classic American goods — including Levi Strauss blue jeans and Harley-Davidson motorcycles — as retaliation against the U.S.'s actions. Following the implementation of the 2018 alcohol tariffs, American liquor exports quickly fell by 33%, equating to hundreds of millions of dollars in lost earnings (via Politico). According to the Distilled Spirits Council of the United States, exports of American whiskey dropped a staggering $256 million in under two years as a result of the dispute.
Last November, Fortune reported the European Union finally struck a deal with the U.S. to drop the steep tariffs on American whiskeys, including bourbon. However, Britain, which officially left the European Union the final day of 2020, wasn't included in this deal, leaving the tariffs between the Brits and the Americans in place.
The deal will end four years of price hikes on bourbon
A similar set of boozy tariffs established during a 16-year aviation trade stand-off between the United States and the European Union were also dropped in 2021, eliminating an extra 25% tariff on alcohol traded between the two land masses (via Food & Wine). While this particular tariff was dropped for the trade of most American-made spirits, the U.S. whiskey industry was left out of the deal, as those tariffs were tied to a separate trade dispute.
Now, after years of trade limbo, the bourbon industry has finally caught a break. In a press release, the U.S. Department of Commerce officially announced the elimination of the British liquor tariff, which has the potential to lead to a huge upswing in whiskey exports. "Since taking office, President Biden has made it a top priority to rebuild our relationships with our allies and partners around the world ... [to] ensure that America is able to compete globally in the 21st century," Commerce Secretary Gina M. Raimondo said in the release. Raimondo added that "by removing the U.K.'s retaliatory tariffs, we reopen the British market to beloved American products."
While for the average American, the re-negotiated tariff deal could potentially mean some economic relief in the face of record levels of consumer inflation, for the Brits it means that Kentucky bourbon — and other American whiskeys — will flow freely once again.