US tariffs 'potentially devastating' for Irish whiskey

US tariffs on alcohol from the European Union have the "potential to be devastating", the Irish Whiskey Association has warned.

On Thursday, US President Donald Trump threatened a 200% tariff on all alcohol coming out of the bloc unless a "nasty 50% tariff on [US] whisky" is stopped.

It's the latest step in a global trade war, after the EU announced 25% tariffs on steel and aluminium imported in the US on Wednesday.

The body, which is in Washington for St Patrick's Day celebrations, said the escalation was "extremely concerning" and that a US-EU trade war puts jobs, investments and businesses at risk.

Irish Whiskey has enjoyed a decade of spectacular growth with global sales more than doubling from 7.3m cases in 2014 to 15.6m in 2023.

The US is by far the biggest export market, taking 5.7m cases in 2023.

That trade is dominated by big brands like Jameson and Powers, but dozens of new craft distilleries have also been targeting the US market.

In a statement, the Irish Whiskey Association said: "There is no winner in a trade war.

"The imposition of tariffs will impact on our businesses and our consumers.

"Having our sector implicated in this dispute puts jobs, investments and businesses at risk and has the potential to be devastating for Irish Whiskey."

It called on the EU and US to de-escalate, adding "the need to remove spirits from this dispute is immediate, and the clock is ticking".

"We note that there is no tariff currently in place, and now is the time for dialogue," the association said.

Taoiseach (Irish prime minister) Micheál Martin has called for the EU to adopt a "strategic approach" to the issue of US tariffs.

Speaking to reporters on Thursday, the taoiseach said the tariffs were "very concerning" for Ireland's spirits industry.

Martin met with Trump in the White House on Wednesday as part of St Patrick's Day events in the US capital.

In the meeting, Trump accused the EU of acting "very badly" towards the US and that counter-tariffs create "ill-will".

The taoiseach added the only way to resolve a deepening trade dispute between the US and EU is "through dialogue".

"Tariffs increase inflation and are not good for the consumer and are not good for business, and that is our view," he said.

"But I do believe there will be some distance to go yet. There will be an EU Council towards the end of next week, and again, there will be discussions and consultations within the European Union in respect of European actions.

"And obviously, again, in that scenario, we'll be endeavouring to protect Irish interests in terms of specific Irish products and Irish sectors."

Earlier, Northern Ireland Secretary Hilary Benn warned there could be an impact for Northern Ireland in any trade war.

He said the introduction of 25% tariffs on steel and aluminium imported in the US on Wednesday was "disappointing".

Speaking at an NI Bureau breakfast event in Washington DC, Benn said he didn't want Northern Ireland to be caught in the middle.

He said tariffs were not really in anybody's interest, and the UK government was working on negotiating a deal with the US.

Benn said he had not had a chance to meet US President Donald Trump yet during his visit to Washington but attended the Speakers' lunch on Wednesday, where Trump gave an address.

Former US congressman Bruce Morrison said that tariffs would be "bad" for Northern Ireland and could interfere with the Windsor Framework.

The former Democratic politician believes that the Republican Party has "lost its nerve" in supporting Trump in whatever he wants to do.

"I think a lot of what's going on is a bad idea; these are bad things, but 77m people voted for him, so we need to tolerate it," he added.

The traditional NI Bureau breakfast is an executive-run event aimed at showcasing Northern Ireland to would-be American investors and celebrating its historical and cultural bonds.

Tariffs are effectively a tax on trade, applied to goods as they enter the country.

The charge is paid by the domestic company that imports the goods, not the foreign company that exports them.

However, the burden can ultimately fall on the exporting firm if it has to cut its prices or finds that it can no longer compete in that market.

They can be used by governments to protect domestic industries by making competing imports more expensive.

Under the post-Brexit deal known as the Windsor Framework, Northern Ireland is essentially still inside the EU's single market for goods and enforces the EU's customs code.

If tariffs were imposed on the UK they would affect Northern Ireland goods.

But even if the UK avoided US tariffs, the Windsor Framework could have implications for Northern Ireland.

If, for example, the US and EU entered into a tariff war with the EU deciding to put retaliatory tariffs in place, it could lead to a situation where Great Britain is not applying tariffs to US goods, but Northern Ireland is.