Diageo suggests alternative to US tariffs

Diageo has called on the US government to implement stricter rules of origin in trade agreements as an alternative to tariffs, according to a letter to the US Trade Representative.

In its March 11 letter, Diageo proposed giving preference to alcoholic beverages with ingredients and processes primarily based in the US or key trade partners like Mexico and Canada. The company argued that this approach would strengthen US supply chains and prevent foreign entities from circumventing tariffs.

Concerns have grown within the spirits industry in both the European Union and the United States, particularly after the former imposed 50 percent tax on American whiskey in response to President Donald Trump’s steel and aluminum tariffs. Trump, in return, threatened a 200 percent tariff on European wine, Champagne and spirits if the EU goes forward with its planned tariff on American whiskey. The European import tax is expected to go into effect April 1.

Reacting to the EU’s decision to raise tariffs on American whiskey, Chris Swonger, CEO of the Distilled Spirits Council of the United States (DISCUS), called it “deeply disappointing”, warning that it would severely impact efforts to rebuild US spirits exports in the EU markets.