June O'Connell, founder and director at Irish Gin and Whiskey manufacturers Skellig Six18 Distillery said that the US tariffs had hit their business hard this year.
Paul McCarthy | Different Six18 distillery
Along the “last street in Ireland” on the rough west coast of the country, June O'Connells Business Skellig Six18 Gin and whiskey-a time-consuming process, which is led by the wind, rain and cool temperatures that roll over the Atlantic all year round.
America was a natural target market when, according to O'Connell, his first mood was sold in 2019 in 2019 because he was very familiar with Ireland and was a big appetite for premium drinks. As an independent supplier, negotiations with distributors, marketers and retailers lasted more than a year and their first products in November 2023 left the United States in early 2024.
Then the political tide began to turn in the White House.
“As soon as things went over how things went over, people tried to put many products in front of their tariffs. We have done some of them, but now the warehouses are full, importers say they no longer send, and they are only the big customers who are priority,” O'Connell told CNBC.
Bottles of Irish whiskey in a shop in Corte Madera, California. The United States is a key market for EU-made spirits that make up 20-40% of exports for most manufacturers.
Justin Sullivan | Getty Images News | Getty pictures
Since the beginning of the year, President Donald Trump's unpredictable tariff announcements have confused companies in all sizes.
The European Union in particular has drawn Trump's anger for her trade surplus for 198 billion euros (231 billion US dollars) in Waren with the USA
He argues that tariffs are needed to establish a more balanced relationship. However, the EU officials argue that trading over goods, services and investments themselves is more likely to be increased and have undertaken to increase oil and gas purchases in order to narrow down the gap.
Last weekend Trump announced that he was planning to reach the EU with a flat rate of 30% compared to August 1, after negotiations had not concluded a framework contract at the last minute. Many uncertainties now depend on whether an agreement can be made in the next two weeks and which details or compromises it could contain.
“It will be a situation for lossless”
The Trump management has already charged a basic tax of 10% on EU imports and a higher prices for automobiles and metals.
The fact that the United Kingdom's trade agreement with the United States has maintained a basic tariff of 10% with some sector exceptions has caused many to assume that this could be the best hope of Europe. The Financial Times reported on Friday that Trump is now taking a harder series in EU negotiations and is pushing for minimum tariffs of 15 to 20%, citing people who were informed about the talks. CNBC did not confirm the report independently.
How the EU is preparing to achieve a collective agreement in Trump's chicken game
The EU's food and beverage trade with the United States is worth almost 30 billion euros, and the Commercial Group Fooddrinkeurope warned this week that every escalation of the tariffs that are generally paid by importers would make European manufacturers and farmers while restricting and increasing the costs for US consumers.
Even the 10% US import tariff imposed in April was a blow to the business, said O'Connell from Skellig Six18, although the effects of the final price on the consumer were much higher as soon as the additional costs were transmitted in the supply chain.
“With regard to the pricing 30% [tariffs] Would be unsustainable. The entire situation definitely suffocates its ambition, which is located in the States, “she added.
For Franck Choisne, President of French Distillery Combier, a 10% tariff was almost manageable. Combier was founded in 1834 and is best known for making the liqueur triple SEC used in Margarita cocktails, and the USA is around 25% of total sales.
France's distillery combination that produces spirits including Triple Sec. President Franck Choisne says that a 30% US tariff could halve sales on the market.
However, Choisne notes that the 10% tariff is on a hit on the currency market. A weaker US dollar this year made it more expensive for the USA to import foreign goods, additional damping on request.
A 30% tariff plus exchange effects would mean that an overall rate of 45 to 50% reflects in the final consumer prices, a level that could halve the turnover of its company.
“We understand that President Trump has a better balance between imports and exports, but with this 30% level the EU will of course react, trade is hit and a situation for loss of loss will be hit,” he said.
US product exporters such as Bourbon would also suffer, said a factor that Choisne kept him optimistic that the two sides would finally negotiate a zero tariff deal for the spirits industry.
In the Lombard landscape in Italy, more than half a million huge bikes from Grana Padano cheese roll from the supply lines of family-run business areas every year. The company, which also produces Parmesan and other hard cheese, exports over 70% of its products and the USA accounts for 15% of total sales.
A shopkeeper stops an Italian Grana Padano cheese in a supermarket on April 17, 2025 in a supermarket.
Stefano Guidi | Getty Images News | Getty pictures
According to his president and CEO Attilio Zenetti, the volatility created by the tariffs this year was different than before.
“There is a lot of uncertainty and does not allow us to organize a real strategy,” he said, trying to send as many products as possible before higher rates may come into force.
Zenetti said that the weaker dollar plus tariffs had already increased the company's US individual trading prices by 25%. “Of course, further increases would think again directly via US major and retail prices, and we fear that this will affect the volume,” he said.
Supplier shifts
For some companies, the reduction in tariff effects meant the consideration of new options for supply chains.
Alex Altmann, partner of the auditing company Lubbock Fine and VP of the British Chamber of Commerce in Germany, said that some EU manufacturers are considering moving their assembly lines to the UK to try to use its existing 10% agreement. In doing so, you have to navigate the complexity of the “origin rules” that determine the source of a product for tax purposes.
Altmann gave the example of a German kitchen appliance manufacturer with strong demand in the USA. The company receives most of its materials from Asia and imports them into the EU with a low tariff tariff. It is not too difficult to move the process of the final assembly to a factory in Great Britain to benefit from 10% instead of potential 30% tariff for products when you enter the USA
“We may have been confronted with these large tariff differences for a long time, but even if they are classified for a few months, it is considerable money,” he added.
Elsewhere, large companies are considering shifting at least some production in the US German industrial agents SiemensFor example, CNBC announced that it took steps to localize production, and the Engineering Group Bosch also said that it would prioritize a local-for-local model to expand its business in North America.
However, it is not possible for the O'Connell from Skellig Six18. This is because the production of “origin protected” – like an Irish whiskey, Italian Parma ham or French champagne – cannot be moved elsewhere.
Instead, O'Connell's focuses on new potential markets in Asia, Africa and Latin America, but found the difficulty to do this in places without solid existing whiskey sales. Meanwhile, Franck Choisne from Combier Distillery pointed out that it is resource -intensive, expensive and could take years. In other words, it is not a simple solution for a decline in the US turnover.
“Sometimes I just try to remember that I am in an industry that is almost 700 years old, requires patience and reminds them that things don't take forever,” said O'Connell. “You just have to control the controls.”
– Sam Meredith from CNBC contributed to this story.
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