The tariffs were originally set to kick in on March 31. The EU has pushed their introduction back to ‘mid-April’ with two objectives: firstly, to lock down the list of products that will be covered by tariffs; secondly in the hope of talking with US officials to de-escalate war.
EU and US trade: Lots at stake
The EU and US have the largest bilateral trade and investment relationship in the world: worth €1.6 trillion in goods and services in 2023. And EU-US bilateral investment flows top more than €5 trillion.
Around 10 million jobs are supported by this set up.
But this is all in jeopardy as a trade war between the two parties escalates.
US tariffs on steel and aluminum were introduced this month: a 25% tariff imposed on €26bn of EU steel and aluminum exports and covering around 5% of total EU exports to the US.
These are mainly unrelated to the beverage industry, although with implications for beverage cans.
The EU tariffs on American whiskey – alongside other alcoholic products – were then proposed in retaliation to these tariffs.
But President Trump has threatened to further retaliate again with a whopping 200% tariff on Champagne and other European alcohol products, causing alarm among EU and US producers alike.
Marcos Sefcovic, the EU’s trade commissioner, says it should be a priority for both sides to ‘protect and develop’ the important trade relationship between the US and EU: one that is worth trillions of dollars.
“I am convinced that continued engagement and a positive approach is the best way forward,” he said, speaking on Thursday as the EU announced the delay. “However, I have always been clear with my US counterparts that we will react firmly and proportionally if we are hit by unjustified measures.”
The delay, he said, would give EU stakeholders a chance to consult on the future phases of tariffs.
“In light of the recent announcement that the US is planning to introduce additional tariffs on 2 April, we are now considering to align the timing of the two sets of EU countermeasures, so we can consult with Member States on both lists simultaneously.
“It also gives us extra time for negotiations to try and find a mutually agreeable resolution.”
The delay should allow the EU the time to create a ‘firm, proportionate, robust and well-calibrated response’ to US tariffs, he added.
The US spirits industry has welcomed the delay in the introduction of tariffs on their products.
“This is a very positive development and gives US distillers a glimmer of hope that a devastating 50% tariff on American whiskey can be averted,” said Chris Swonger, Distilled Spirits Council President and CEO, also speaking on Thursday.
“We urge the EU and US to reach an agreement that will return and safeguard zero-for-zero tariffs for spirits trade, benefitting the spirits and hospitality sectors.”