LOUISVILLE, Ky. (AP) — Like a watered-down drink, domestic sales for American whiskeys were unsatisfying in 2024, as inflation reined in consumer spending on some distilled spirits. But it’s tariffs that loom as one of the stiffest challenges ahead, threatening to deplete sales in key foreign markets, an industry group said Tuesday.
Brewing trade conflicts with Canada and Mexico risk driving up the price of U.S. spirits in those markets. The biggest risk is in the European Union, where tariffs are set to resume April 1 at double the rate on American whiskey producers, who again find themselves ensnared in a trade dispute over steel and aluminum. The new tariff would undo the strong rebound in American whiskey sales in Europe since a 25% EU tariff was suspended a few years ago, the Distilled Spirits Council said.
“The reimposition of these tariffs at a 50% rate would gut this growth and do irreparable harm to distillers large and small,” Chris Swonger, the council’s CEO, said of the EU. «It would be a catastrophic blow that will force many distillers out of our largest export market.”
Talk of tariffs cast a shadow over the council’s report on 2024 U.S. spirits sales, which revealed a drop in domestic sales for the American whiskey category, which includes bourbon, Tennessee whiskey and rye whiskey. The council, an industry trade association, didn’t break out sales for each type of whiskey.
As President Donald Trump pushes to reset global trade, U.S. spirits can be a high-profile target for retaliation. During trade conflicts in Trump’s first term, American whiskey exports to the EU plunged by 20%, the council said. Once the tariff was suspended, those exports surged by 60%, it said.
Canada, another key export market for American spirits, initially ordered tariffs on American imports, including beverages, until a reprieve was announced last week. Before the pause, authorities in several provinces said they planned to remove American liquor brands from government store shelves.
Trump has alternately said he sees import taxes as a tool to force concessions on issues such as immigration, but also as a source of revenue to help close the government’s budget deficit.
But anxiety is now high among whiskey producers and their supporters, many of them in states that voted overwhelmingly to return Trump to the White House. That includes Kentucky, where 95% of the world’s bourbon supply is crafted and where a record 14.3 million barrels of bourbon were aging at the start of 2024, according to the Kentucky Distillers’ Association.
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