LOUISVILLE, Ky. (WDRB) -- Kentucky's bourbon industry received an early Christmas gift Tuesday when the European Union delayed a planned 50% tariff on American whiskey.
The tax on U.S. whiskey had been slated to return on Jan. 1, 2024 after a two-year reprieve, but now it will remain suspended until March 1, 2025, the E.U. announced Tuesday.
A 50% levy on American whiskey products such as Jack Daniels would have been a "devastating" blow to sales in European countries, the industry has said.
Those sales help support thousands of distilling jobs in the U.S.
Kentucky, which produces the vast majority of the world's bourbon, and Tennessee — where Jack Daniels and other whiskies are made — would have had the most to lose, according to an analysis of government trade data by the Distilled Spirits Council of the United States.
Lawson Whiting, CEO of Louisville-based Brown Forman Corp., which makes Jack Daniels, told analysts on Dec. 6 that the delay was expected.
"Our pretty strong belief is that this will be kicked down — they'll kick the can down the road for at least a couple of years," he said on the company's quarterly earnings call.
The U.S. whiskey tax started in 2018 when European officials were responding to then-President Trump's imposition of tariffs on imported steel and aluminum.
President Joe Biden administration's negotiated a temporary suspension in 2021, but whiskey industry leaders are hoping for a permanent reprieve.
"Our signature industry has worked hard to recover and regain footing from the last short-term suspension of tariffs," said Eric Gregory, president of the Kentucky Distillers Association, in a statement. "As bourbon takes years of aging to perfect, a permanent solution will bring certainty to our distillers as they look to continued growth and investments in international markets."
