July 1 tariff date extended: The administration continues to negotiate various trade deals and yesterday announced that any new tariffs will be further delayed until August 1, extending the original date of July 9 by three weeks. Reuters included a quote from Commerce Secretary Howard Lutnick indicating that any higher tariffs would take effect on August 1, but that the President was “setting the rates and deals right now." On Truth Social, Trump wrote that the US would be mailing letters indicating tariff rates starting today at noon. In other posts, he targeted countries that align with the BRICS countries (Brazil, China, India, Russia, South Africa, Egypt, Ethiopia, Indonesia, Iran, Saudia Arabia and the UAE) threatening an additional 10% tariff. The position on hundreds of other countries remains uncertain, with indication that letters will be going out to countries that have a low level of trade with the USA notifying them of higher tariffs. The goal of the Administration appears to be to push trade talks along and come up with agreements that can prevent any additional tariffs on August 1 or a further delay of tariff implementation. Reuters also reported that US Treasury Secretary Bessent said that the focus is on the 18 largest trading partners, and that talks with the European Union have made good progress.
We will continue to monitor and report on the impact on the beverage alcohol segment as soon as news is available.
China and Cognac: In other news, China announced duties up to 34.9% on EU brand producers that went into effect on July 5. Major producers, however, were excluded, including Pernod Ricard, LVMH and Remy Cointreau. Other products can be excluded if they agree to sell at a minimum price. The announcement is the final determination of an anti-dumping investigation on EU brandy that has been going on for over a year and is reported to be part of a retaliation on EU’s tariff levels on Chinese made electric vehicles. China will also return deposits on the anti-dumping duties paid when the provisional duty rates were implemented in October of 2024. The overall deal on minimum pricing to avoid punitive tariffs has been met with mixed reviews but overall is more favorable than the anti-dumping duties.