There’s a big worry for the folks who make American whiskey. The European Union (EU), which buys a lot of American whiskey, is thinking about putting a huge tax, called a tariff, on it. This could be really bad for the businesses that make this tasty drink in the United States.
Background: Whiskey Business and Past Taxes
For a long time, making whiskey in America has been a big deal. There used to be just a few places making it, but now there are a whole bunch – around 2,600! But here’s the problem: the EU is not happy about something related to steel and aluminum, and they want to put a 50% tax on American whiskey. This happened before when there was a 25% tax between 2018 and 2021. It made it harder for American whiskey to be sold in other countries.
Recent News: More Taxes Coming?
Now, the EU is talking about doing it again with an even bigger tax. This worries the people who make whiskey because they worked hard to get their sales back up after the last tax. They sold 118% more whiskey to the EU in the first half of 2023 compared to the same time in 2022.
Talking to an Expert: What’s Going On?
A person who knows a lot about this, Chris Swonger, talked about it. He said, during the time when Donald Trump was in charge, there were some disagreements about trade with the EU. As a result, the EU put a 25% tax on American whiskey. This made the whiskey business really nervous because it had nothing to do with the disagreement. Luckily, the tax got suspended in 2021, and everyone felt relieved.
The Clock is Ticking: Time Running Out
But here’s the thing: the suspension of the tax will end in December 2023. If the US and the EU don’t fix the problem before then, the EU will bring back the big tax in January 2024. This is making the people who make whiskey pretty anxious because a 50% tax could hurt their sales a lot.
How Bad Could It Be? Counting the Cost
The EU is the biggest market for American whiskey, and the last tax made the sales drop by 20%. It went from $550 million to $440 million between 2018 and 2021. If they do this new 50% tax, it could be even worse. Chris Swonger is saying it would be really bad for the whiskey business, and they’ve already worked so hard to get back to where they were.
Wrapping Up: Please, No More Taxes!
With less than two months left until a decision is made, the people who make American whiskey are asking for a solution. They want the US and the EU to talk and find a way to fix the problem. Otherwise, the whiskey business could be in big trouble again.