EU Drops Plans for Retaliatory Tariffs on American Bourbon

In a significant development amid ongoing trade tensions, the European Union has opted to remove plans for imposing retaliatory tariffs on American bourbon. This decision follows intense lobbying efforts from various EU member states, particularly emphasised by the whiskey-producing nation of Ireland and renowned wine nations including Italy and France.

The discussions within the EU, prompted by the recent escalation of trade disputes initiated during Donald Trump’s tenure, had created an environment of uncertainty not only for American producers but also for European companies that feared the repercussions of a broader trade war. The draft list, originally targeting $26 billion worth of US goods, has been trimmed to $21 billion, reflecting the EU’s effort to balance its responses while minimising domestic industry repercussions.

Irish Foreign Minister Simon Harris raised concerns about the strategic relevance of targeting bourbon, while French Prime Minister François Bayrou labelled the inclusion of bourbon in the list as a considerable misstep. The French drinks industry particularly expressed fears that severe tariffs, which could reach as high as 200%, would devastate their market and cripple exports to the US.

Historically, bourbon was earmarked as a potential target due to its emblematic status within US exports. The recent trade dynamic has heightened alarm within the alcohol industry as both sides of the Atlantic have sought to wield tariffs as leverage. Spirits trade between the US and EU has flourished in the past, with a dramatic 450% increase since the removal of tariffs in 1997, reaching a total value of €6.7 billion by 2018.

The implications of these tariff adjustments extend beyond bourbon itself; Irish whiskey exports to the US were valued at between €420 million and €450 million in 2024. The growing number of craft distilleries across Ireland is reshaping the market landscape, making it vital for policymakers to consider the long-term impacts of trade decisions in the spirits sector.

As negotiations continue, EU officials reiterate a commitment to minimising damage while seeking to maintain substantial leverage in international discussions. The long-standing relationship between the US and EU in the spirits market is critical, and recent developments signal a cautious yet optimistic pathway forward.