New US tariffs imposed on Cognac and wine as trade battle heats up

Cognac will be subject to a 25 percent tariff in the US from now on.

A coalition of 21 trade associations representing US, European Union and United Kingdom wine, distilled spirits and related sectors has expressed disappointment in new US tariffs come into effect today (12 January 2021) on certain Cognac, other grape brandies, and non-sparkling wine from France and Germany.  

“We are extremely disappointed with the imposition of additional excessive tariffs on certain Cognacs, other brandies and wines from France and Germany,” said the coalition. “These tariffs will just compound the harm caused by existing tariffs. The added pressure resulting from these tariffs will force more businesses to close their doors and more workers to be laid off in sectors already negatively impacted by the global pandemic.”

Since June 2018, there has been a steady escalation in the number of tariffs on distilled spirits and wines on both sides of the Atlantic as part of unrelated trade disputes. The coalition believes these tariffs are having a damaging ripple effect throughout the entire industry. 

In November of 2020, the coalition said “the application of excessive and unwarranted tariffs has to end” after the EU imposed tariffs of up to 25 percent on US rum and vodka. The coalition has reported declines in exports of many popular spirits, including Scotch Whisky and European wine.

According to the coalition (which includes SpiritsEUROPE, the Scotch Whisky Association and the Distilled Spirits Council of The United States), the tariffs cause widespread harm which impacts distillery and winery workers, importers, exporters, distributors, retail and restaurant workers, as well as farmers, packaging companies and logistic providers.

“The spirits and wine industries have been suffering since the imposition of retaliatory tariffs in 2018 related to disputes wholly unrelated to the drinks business.

“It is beyond time for these unwarranted and excessive tariffs to be suspended. We are strongly urging the US, EU and UK to return to the negotiating table without delay and reach an agreement to immediately suspend these tariffs,” the coalition added.