Tariffs hit U.S. whiskey producers hard in Europe

LOUISVILLE, Ky. — American whiskey distillers have watched more than $300 million in export revenues evaporate in the two years since becoming entangled in a trade dispute between the Trump administration and the European Union, according to estimates in a new report.

Exports of American whiskey — mostly bourbon, Tennessee whiskey and rye whiskey — to the EU have fallen 33 percent since the EU imposed a retaliatory tariff on those products on June 22, 2018, according to the report issued Monday by the Distilled Spirits Council of the United States.

The EU targeted American whiskey and other U.S. products in response to President Donald Trump’s decision to impose tariffs on European steel and aluminum.

Those duties amount to a tax, which producers can either absorb in reduced profits, or pass along to customers through higher prices — and risk losing market share in highly competitive markets.

The new report shows that the tariffs “derailed a great American export success story,“said Chris Swonger, the council’s president and CEO.

“American distillers enjoyed two decades of unparalleled growth in the EU prior to the implementation of these retaliatory tariffs,” Swonger said. “This report makes clear that these tariffs took the wind out of the sails for American Whiskey exports to our top export market.“

From 1997 through June 2018, American Whiskey exports to the EU surged from $143 million to more than $750 million. The trend has turned in the other direction since the tariffs hit.

American whiskey exports to the EU fell from $757 million to $501 million — down $256 million, or 33 percent — between June 2018 and April 2020, the last month export data was available, the report said.

Globally, the U.S. exported $955 million of American whiskey in 2019, the council said.