Analysis Shows Tariffs Could Cost up to 45,800 U.S. Jobs

Trade groups representing several beverage alcohol suppliers, wholesalers, importers and retailers, submitted comments to the United States Trade Representative (USTR) urging the removal of spirits, wine and non-alcoholic beer from its draft list of European Union (EU) products being targeted for proposed retaliatory tariffs.

The preliminary list of targeted EU products, which was announced by the USTR April 8, includes brandy, liqueurs and cordials, wine and non-alcoholic beer, as well as many other EU products. The issuance of the proposed list is part of a long-standing dispute at the World Trade Organization (WTO) regarding civil aircraft subsidies and is unrelated to the beverage alcohol industry.

In the submission, the groups stated they "strongly oppose the inclusion of beverage alcohol products in the proposed retaliation list" and warned that the tariffs will have numerous unintended negative consequences, including on U.S. jobs, U.S. consumers and on U.S. companies that export to the EU, some of which already face retaliatory tariffs to that market.

The proposed retaliatory tariffs on certain beverage alcohol products imported from the EU would impact nearly $6.8 billion in imports and could lead to a loss of approximately 6,600 to 45,800 U.S. jobs, according to an industry analysis.

The groups pointed out that many U.S. companies--from farmers, to suppliers to retailers--are already being negatively impacted by the imposition of retaliatory tariffs by key trading partners on certain U.S. distilled spirits and wines resulting from other trade disputes, and that additional tariffs will only inflict further harm.

They cited, for example, that several small U.S. distillers and wineries report that their export orders have been cancelled after spending years of work and hundreds of thousands of dollars building up demand for their products in overseas markets. As a result, some U.S. distillers and wineries are holding off on expansion plans and new hires.

The EU responded to the U.S. draft list with its own preliminary list of U.S. products that it would target for retaliatory tariffs in a related WTO dispute, which included wine, rum, vodka, and brandy.

The groups stated, "We are gravely concerned that this escalation would compound the negative impact of the tariffs on a sector that is already feeling the damaging impact resulting from unrelated trade disputes."

The joint comment was submitted 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, American Beverage Licensees and the National Association of Beverage Importers.

(click here to read the full text of the public comment)