The Current State of Tariffs and What They Mean for the Alcohol Industry
- Vik F.
- 20 hours ago
- 3 min read
The U.S. spirits and wine industries are once again facing serious challenges as global trade tensions escalate. For more than twenty years, the trade relationship between the U.S. and EU was considered a model of fairness. Since 1997, both sides had operated under a zero for zero tariff agreement for spirits, allowing for mutual growth and collaboration.
That changed in 2018 when the EU imposed a 25 percent retaliatory tariff on American whiskey in response to U.S. steel and aluminum policies. The results were immediate and damaging. American whiskey exports to the EU fell 20 percent, dropping from 552 million dollars in 2018 to 440 million dollars by 2021.
When the retaliatory tariffs were suspended, the industry began to recover. From 2021 to 2024, American whiskey exports surged nearly 60 percent, climbing to 699 million dollars. But that progress is now at risk. The EU’s suspension is set to expire on April 13, and if no agreement is reached, the tariff will not only return but increase to 50 percent. Additional categories of U.S. spirits and wines could be targeted as well.
New developments beyond the EU
The issue is not limited to the EU. Canada has already imposed a 25 percent tariff on American spirits and wines and pulled them from store shelves in most provinces. In the U.S., a new trade policy is set to roll out in April. Starting April 5, a 10 percent universal tariff on all imported goods will take effect. Then on April 9, that tariff will increase for 60 countries, including the EU, where it will double to 20 percent.
There is one partial exception. Under the USMCA agreement, spirits from Canada and Mexico can continue to be imported duty free, as long as they are properly declared during importation. Still, this exemption only applies to a limited share of the global market.
The impact across the industry
This is not just about export numbers. The U.S. spirits sector supports more than 200 billion dollars in economic activity, 1.7 million jobs, and the purchase of 2.8 billion pounds of grain from American farmers. When tariffs are in place, the effect ripples across the entire supply chain. Farmers, distillers, vintners, hospitality workers, bartenders, retail staff, importers, and truck drivers all feel the impact. Consumers also lose access to the products they enjoy or face higher prices.
Industry leaders are taking a stand
Chris Swonger, President and CEO of the Distilled Spirits Council of the United States, has been vocal in urging action. He described the U.S.-EU spirits trade as a model for how fair and reciprocal trade should work. He emphasized that the dramatic growth in exports during the suspension proves what is possible when tariffs are removed.
Earlier this year, a DISCUS-led petition opposing the return of tariffs gathered nearly 13,000 signatures. That effort is now expanding through Spirits United in partnership with the Toasts Not Tariffs Coalition. This coalition includes 54 associations representing all parts of the U.S. alcohol industry, and they are urging the administration to secure a new agreement that protects zero tariff trade.
In a recent statement, the coalition shared support for reports that EU Commissioner Maroš Šefčovič and U.S. Secretary of Commerce Howard Lutnick are meeting to discuss the proposed escalation of tariffs. The group called this dialogue a positive step and emphasized the urgent need to resolve the trade disputes that continue to pull the industry into unrelated policy battles.
Why it matters right now
The message from the industry is clear. Tariffs on distilled spirits and wine threaten American jobs, harm small businesses, and stall momentum for a sector that has already proven its strength and resilience. When tariffs were suspended, exports grew and investments followed. When they were in place, growth slowed and market share shrank.
With multiple deadlines approaching in April, industry members are being called on to take action. Signing petitions, contacting representatives, and supporting fair trade advocacy efforts can make a difference. What happens next could define the future of American spirits and wine on the global stage. We need progress. We need access. We need toasts, not tariffs.
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