Trump’s trade war hurt Kentucky bourbon
And it could be getting worse.
Exports LEXINGTON, KY. — of Kentucky bourbon were down 34 percent in 2020. But that isn’t the bad news.
The bad news is that things could be worse in 2021, if tariffs on American whiskey increase to 50% in June, according to the Kentucky Distillers’ Association, an industry trade organization.
“Our signature bourbon industry has sustained significant damage for more than two years because of a trade war that has nothing to do with whiskey,” said KDA president Eric Gregory. “And it will get much worse if we can’t deescalate this dispute.
The European Union, which is the biggest foreign market for bourbon, is expected to double its tariffs in an escalation of former President Trump’s trade war. American spirits were targeted after the U.S. raised tariffs on unrelated imports from the EU.
Exports last year to the EU were down 50% and are expected to fall more if the trade disputes are not resolved, the KDA said in a news release.
Now the KDA is lobbying President Biden to end the trade war.
“We are officially asking President Biden and his administration to work with their counterparts overseas, suspend tariffs and settle these ongoing trade disputes before more long-term damage is done. A speedy resolution is in the best interest of our country and our Commonwealth,” Gregory said.
Kentucky Reps. John Yarmuth, D-Louisville, and Andy Barr, R-Lexington, who chair the Bourbon Caucus, are drafting a letter to the Biden trade officials asking for help.
The industry was targeted in 2018 after the U.S. imposed a 25% tariff on steel and aluminum from the EU. In retaliation, the EU slapped a 25% tariff on American whiskey and other goods.
According to the Kentucky Cabinet for Economic Development, exports of bourbon and other American whiskies fell from $455 million in 2018 to $319 million in 2020, a 35% drop.
Exports specifically to the EU have plunged 48% in the same two years from $257 million to $135 million.
Kentucky has been among the hardest hit states, along with Tennessee, where Jack Daniel’s Tennessee Whiskey is produced. Jack Daniel’s is owned by Louisvillebased Brown-Forman and is the biggest selling American whiskey in the world.
Kentucky’s $8.6 billion distilling industry also is smarting from reduced tourism, which fell by two-thirds last year during the coronavirus pandemic when tours were stopped.
“This non-stop trade war has harmed Kentucky consumers, farm families, cooperages, glass and other suppliers, and our historic, homegrown distilling industry,” Gregory said. “We are hopeful that leaders around the globe will jumpstart negotiations and bring these trade wars to an end before things get worse. We’ll be glad to provide the bourbon if it helps.”