A new 25% tariff imposed by the European Union (EU) member states on imported U.S whiskey will push up prices of the Tennessee-based whiskey, Jack Daniels. A range of U.S imports into the E.U will be affected by the increase in tariffs. Products such as the said whiskey, bourbon, orange juice, and motorcycles have been slapped with the new E.U tax.
The European Union seem to be reacting to the recent decision to tax European steel by 25% and aluminum 10% by the U.S President Donald Trump’s administration. The U.S tariff also affects both Canada and Mexico.
The increase of the whiskey prices is scheduled to come in to effect in the next several months. This is to allow the stockpiled cases of the whiskey to be sold off. This is according to Jack Daniel’s manufacturer Brown Forman (BF.B) spokesman, Phil Lynch. He said that the prices may not necessarily be standardized across the region since merchants and local distributors are allowed to determine the prices.
Large European market
About 25% of the Tennessee manufactured whiskey is sold in the European market. Mexico also increased its tariff to 25%. But since Jack Daniel’s prices had been increased recently, the company stated that it will not affect another price increase.
Earlier this week, Harley Davidson announced that it plans to relocate its production for motorcycles targeted for the European market, from the U.S due to the tariffs. Trump was quick to criticize the motorcycle producer. Via several tweets, he accused the company of using the tariffs issue as an excuse to shift production out of the country. He even warned the company that it will incur a big tax when selling its products back to the country.
The European Union’s revenge tariffs on the U.S joins a list of countries that have opened salvo in trade wars with the U.S. There are trade tensions being experienced currently between the United States and China. This has caused volatility in several markets.
Asian stocks have been falling, extending the worst week for regional equities since late March. Japan Topix index experienced a decline of almost 3% in one week, while equities also fell in China and Hong Kong.
Custom agents across the European market, which boasts a population of 500 million people will now impose the duty. EU Trade Commissioner, Cecilia Malmstrom, stated that the 28-nation bloc was left with no other choice but to impose its own tariffs after the unilateral and unjustified decision of the U.S.
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