The Trump administration unveiled plans to tax European Union imports, including Irish food and beverage products, such as Kerrygold butter, Baileys Irish cream, and Irish whiskey.
President Donald Trump's administration has unveiled plans to tax the European Union (EU) imports, including butter, cheese, pork, and several drink products, including liqueurs, following the World Trade Organization ruling on Wednesday. Famous Irish brands such as Kerrygold butter and Baileys Irish Cream as well as Irish whiskeys made in Northern Ireland and other liquors will be affected.
The new tariffs will take effect from 18 October. The United States Trade Representative's Office released the list of hundreds of European products that will be subjected to new 25 percent tariffs in retaliation for European Union aircraft subsidies.
Brexit and the world economy
Experts believe these new taxes will have a highly detrimental impact on the economy of the island of Ireland and smaller craft distillers, particularly for Northern Ireland, as Brexit looms large on the horizon.
The latest escalation by the Trump administration come be the beginning of a new chapter in the US government's trade wars that have already caused a depression in the world economy, which as stock markets dropped this week, have heightened fears over a global recession.
Currently, the United States is negotiating a resolution to the high-stake trade war with China, which has been ongoing since 2018.
EU taxes, a "big win for the United States"
On Wednesday the World Trade Organization authorized the United States to impose duties on $7.5 billion worth of European goods after it decided that the EU failed to end subsidies for Airbus.
US Trade Representative Robert Lighthizer said, "For years, Europe has been providing massive subsidies to Airbus that have seriously injured the US aerospace industry and our workers."
He added, "Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU's illegal subsidies."
President Donald J Trump told the press at the White House the WTO ruling was a "big win for the United States".
In a parallel process, the European Union is pushing for tariffs of around $10 billion on US goods. This will be decided by the WTO in early 2020.
Irish disappointed and concerned
Irish organizations representing the drinks industry told RTE they are disappointed and concerned by the United States' new tariffs. While whiskeys from Scotland and Northern Ireland, including Bushmills, will be hit, it appears that Irish whiskey has been exempt from the taxation.
Director of Drinks Ireland, Patricia Callan, said there are no winners in a trade war.
She called on the Irish Government to use the upcoming budget, to be announced on Oct 8, 2019, to support the drinks industry by reducing excise on drinks products and providing support for Irish producers.
Callan said, "We are disappointed and gravely concerned that both Irish cream liqueur (from Ireland and Northern Ireland) and Irish whiskey (single malts from Northern Ireland) will be subject to tariffs in their largest market, the United State."
She added, "We are particularly disappointed that, yet again, spirits categories have been dragged into a trade dispute about unrelated sectors, in this case, aircraft."
In 2018, 78.5 million bottles of Irish whiskey and Irish cream liqueur were sold in the United States. Callan told the RTE "These sales help support thousands of jobs across the US and in Ireland, north and south, including in the agricultural sector which supplies Irish barley and cream for these products."
Also, more than 34,000 tonnes of Kerrygold butter was exported to the United States in 2018, making it the second most popular butter brand in the country.
The Irish Times report that analysis by Ibec, the business organization, and lobbying group, found "Irish goods would be the most exposed, on a per capita basis, to the proposed US tariffs on EU goods, noting that €818 million worth of products would be hit."
The organization wrote: "Given that the food and drink sector makes up two-thirds of the exports of indigenous firms, there is potential here for significant knock-on impacts on the domestic economy."
For full listings on the new tariffs visit ustr.gov.
Do you agree with the news US taxes? Do you think it will affect the purchasing of the Irish products in question in the United States? Let us know your feelings on the new taxes in the comments section below.