Whiskey, Harley prices expected to jump in Europe as tariffs take effect
iStock/Thinkstock(LONDON) — In the heart of London’s Soho, whiskey mecca Milroy’s of Soho has a section dedicated exclusively to American whiskey.
“The rarer products we get in … they’ll be hit fairly quickly because there’s not that much of it in the country,” the owner of the shop, Simo, who prefers to go by just one name, told ABC News.
Milroy’s customers will feel the price rise quickly, he said Friday afternoon, as whiskey drinkers filed in after work.
The European Union’s imposition on Friday of tariffs on American imports in retaliation for President Donald Trump’s tariffs on aluminum and steel imports will be applied to anything that leaves the U.S. today, going forward.
The American tariffs effect some $7.5 billion worth of European goods coming into the U.S., while the current European tariffs hit some $3.2 billion worth of American goods.
But it’s the specific goods the E.U. chose that matters, economist Matthew Oxenford, of the London think tank Chatham House, told ABC News in an interview at Milroy’s.
The E.U. has levied a 25 percent duty on scores of products, including iconic American brands Levi jeans, Harley-Davidson motorcycles and Kentucky bourbon. Some other goods have been hit with 10 or 50 percent tariffs.
“I think any sort of retaliatory tariff like this sort of tariff is designed not to inflict the most economic damage but the most political damage on the people who implemented these tariffs, in this case President Trump. So they’re targeting iconic brands that have political resonance with powerful Republicans in Congress such as Kentucky Senator Mitch McConnell, Wisconsin Representative Paul Ryan, also the new potential House Speaker Kevin McCarthy from northern California, near where Levi’s is headquartered,” Oxenford said.
Even orange juice from Florida, a swing state in U.S. presidential elections, is included.
“Generally when economists talk about a tit-for-tat trade war, this is exactly what they’re talking about. The United States has implemented tariffs on steel and aluminum, the EU has retaliated, the U.S. thinks that’s unfair and is retaliating further,” Oxenford said.
Trump on Friday threatened to impose a 20 percent tariff on cars from the E.U.
“This could become something that affects more and more and more products, and more and more and more consumers will feel the pinch,” Oxenford said.
Harley-Davidson in the UK declined an invitation from ABC News for an interview but in a statement said its position on tariffs hadn’t changed. “We support free and fair-trade policies that address barriers to international growth and allow us to compete globally,” the company said.
For Simo, Kentucky bourbon may cease to compete, and his customers’ taste may just shift.
“Europe is actually the largest emerging market for American whiskey. I mean the UK alone imported 124 million pounds last year. That’s just in the UK alone. And unfortunately with this 25-percent tariff, it’s going to make it slightly unobtainable for sort of those whiskey drinkers coming in,” Simo said.
“It’s going to kill the American whisky industry here,” he added, saying he was among those in the U.K. who wore Levi jeans and drove a Harley-Davidson. “Yeah, my life is about to get a bit more expensive.”
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