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Thousands of US jobs at risk if drinks tariffs imposed

Published:  06 August, 2019

Nearly 80,000 jobs in the US drinks sector could go if the US government targets wine and spirits in its tariff dispute with the EU, the industry has warned.

The threatened imposition of 100% tariff on EU products such as cognac, whisky and wine would reduce retail sales by some $10bn and see 78,600 US workers lose their jobs, leading US drinks trade organisations said in a joint submission to the United States trade representative at the World Trade Organisation.

Lower tariffs would have a less damaging, but still highly negative impact. A 25% tariff would cost around 26,200 jobs, the statement noted.

The escalating dispute between the US and the EU, which stretches back some 15 years, is focused on state subsidies to plane manufacturers, Boeing in the US and Airbus in Europe.

The industry also expressed concern about the impact of further retaliatory tariffs from the EU targeting US drinks exports.

Exports of US whiskey to the EU have fallen 19% since June 2018, when the EU imposed a retaliatory tariff of 25% on all US whiskeys in response to the US imposition of steel and aluminium tariffs.

“If beverage alcohol products remain on the final US list, the EU would certainly respond by keeping US beverage alcohol products on its list, thus inflicting more damage on US companies that export to this critically important market and hampering the export progress that has benefited our sectors and created good paying jobs across the US,” the group statement said.

The EU has threatened to impose tariffs on imports of US wine, vodka, and rum.

The submission was made jointly by the Distilled Spirits Council of the United States, American Craft Spirits Association, American Distilled Spirits Association, Kentucky Distillers’ Association, Wine Institute, WineAmerica, Wine & Spirits Wholesalers of America, Wine and Spirits Shippers Association, American Beverage Licensees and the National Association of Beverage Importers.

The Scotch Whisky Association has welcomed the testimony. “We stand united with US distillers and other European spirits producers. Our sector has a longstanding commitment to free-trade, which has boosted jobs and investment and given consumers freedom of choice and the opportunity to support world-class distilled products,” it said in a statement.

“After twenty years of tariff free access to US and EU markets, any tariffs on spirits could result in a loss of productivity, investment and employment.”

US wine exports to China have fallen 57% since the beginning of 2019 when China imposed a 54% retaliatory tariff on US wine imports in a separate dispute.




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