Beverage Daily reported on Monday that scotch whisky distillers felt a slight bit of relief when Trump tariff talks led to a reduction from the threatened 30% tariff to a lower 15%. European steel and aluminum will continue to see a 50% tariff.
The outlet reported that there is still an opportunity for a zero-for-zero tariff on specific products, yet that remains unclear whether or not the administration will make that happen. What remains an even bigger question mark is whether the zero-for-zero exemption will apply to scotch whisky.
According to Reuters, zero-for-zero exemptions were just the result that those within the spirits industry were hoping for. Many companies within the liquor industry have experienced a difficult year, including heavy hitters like Johnnie Walker’s parent company, Diageo and Constellation. Issues such as lawsuits and production halts have plagued these major spirits suppliers this year, and the looming uncertainty with global trade hasn’t helped.
The outlet claimed the move was a”lifeline” for these brands. Major suppliers already face setbacks as American consumers shift their spending away from alcohol.
The Terms of the Latest Trump Tariff Talks
The Guardian reported that the negotiations ended with the European Union agreeing to purchase $750 billion in energy from the United States. The EU also claimed it would invest $600 billion into the United States, making it appear that, in some ways, Trump had the upper hand in the exchange.
France had harsh words for the way the European Union handled the negotiations.
“Donald Trump only understands force,” French Trade Minister Laurent Saint-Martin said, according to The Guardian. “It would have been better to respond by showing our capacity to retaliate earlier. And the deal could have probably looked different.”
The President shares that pharmaceuticals will remain exempt from the tariffs until further notice. The EU warned that if Trump walked back his agreement, the countries would retaliate with tariffs on the United States.
As for wine and spirits, negotiations will continue between the United States and the European Union. The outlet reported that Irish distilleries, which face multiple headwinds of late, were particularly elated by the news.
Yet the latest deal could potentially divide Ireland. Per the terms, Northern Irish businesses can sell things to the United States at a reduced tariff rate of 10%. Ireland, however, is facing the standard 15% tariff.
On July 1, Diageo’s Roe & Co. joined the ranks of other Irish whiskey brands like Tullamore and Midleton Distillers in taking a production pause. The move further cemented suspicions that something is very much going on with Irish whiskey.
“In order to optimize resources and support the sustainable future growth of our business, we have made the decision to put an extended pause on distillation at the Roe & Co distillery,” a spokesperson for Diageo said in a statement. “The Roe & Co Visitor Center will remain open to the public, and we will continue to blend and package Roe & Co to meet existing and new consumer demand using existing inventory.”
Regardless, the global market appears to be in a volatile space lately, and only time will tell what the affects are for the industry.
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