iStockphoto / Viacheslav Sirenko
Single Malt Whiskey lovers won’t be stoked with the latest set of tariffs announced by the Trump Administration. I know this because I’m a devout worshiper of Scotch and I’m not looking forward to this 25% hike in price getting immediately passed along tot he consumer or forcing smaller distilleries out of business because they can’t cope with the shift.
At first glance, this would seem like a tariff the European Union would use against the US in a trade war because it’s literally putting a tariff on all of Europe’s best products but this tariff announcement comes from the Trump Administration not in retaliation to 2018’s Bourbon tariff but a dispute dating back to 2004.
The United States market is the largest consumer of Single Malt Scotch. We also LOVE Irish Whiskey. Some of my favorite products include Italian cheese, Spanish olives, wool clothing from England, Scotland, and Ireland. These will all be affected by the new tariff announcement according to Forbes.
Taking effect October 18th, the U.S. Trade Representative’s office released a list of hundreds of goods that will get hit hard beyond whisky. It includes Parmesan cheese from Italy, olives from France and Spain, wool clothing from the U.K, and European aircraft. The overall list covers approximately $7.5bn of goods.
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It certainly is a major piece of bad news for the Scotch whisky industry, as the U.S. is its largest market. Overall Scotch whisky exports to the US last year were worth $1.3bn, accounting for over a fifth of total global exports by value. The U.S. single malt market itself is worth $463 million dollars, over a third of the entire global Scotch single malt market. (via)
Scotch whiskey saw record sales globally last year but the holidays are on the horizon, the biggest shopping season of the year, and the industry will definitely need to brace for a hit in sales. For comparison’s sake, the U.S. Bourbon industry saw an 8% global slump in exports last year after tariffs were issued on U.S. Bourbon and Whiskey.
Why now? Why these tariffs? Here’s the explanation from Forbes:
So why is this happening? It all has to do with planes, rather than the tariffs that the E.U. had placed on Bourbon in 2018 (which in turn were initially placed because of steel tariffs). This latest round is the result of a dispute that originally began in 2004, when the U.S. complained to the World Trade Organization about the subsidies the E.U. was providing to Airbus for the development of its A380 and A350 planes, to the detriment of Boeing. The case has been argued about ever since, and has now escalated following a WTO ruling issued yesterday as global trade wars between the Trump administration and the rest of the world heat up. (via)
I recently ran into a friend at a poker game whom I hadn’t seen in 5 years. He just embarked on a new career in financial services after working in sales for the past few years. I’d assumed that he was tired of sales and wanted to make the jump but he went on to explain how he’d been selling aluminum/steel and the local company he was working for is shutting down because there were zero profits to be made with the current tariffs and trade war.
I thought he was fucking with me because this is Sarasota, Florida, not steel country, and I hadn’t yet seen this trade war affect anyone I know firsthand but now with the news of these single malt, cheese, olives, and wool tariffs I’m realizing that many of the things I love in life are about to get jacked up in price.
It’s hard to see any end in sight to these tariffs on Single Malt, Cheese, Olives, Wool, and the total $7.5 billion list of goods.
If you want a deeper dive into the Airbus-WTO-USA-Boeing-EU dispute you can click here for an in-depth explanation on the Wall Street Journal.