European nations threaten punitive whiskey tariffs towards U.S. spirits industry, potentially causing severe damage
Relax, grab a drink—the spirit game's heating up!
Prepare for some turbulence in the booze biz, as the US spirits industry gears up for a bumpy ride following the EU's move to take a swig at American whiskey in response to Trump's steel and aluminum tariffs. Christ Swonger, CEO of the Distilled Spirits Council of the United States (DISCUS), hit the nail on the head calling the EU's 50% hike in whiskey tariffs "deeply disappointing."
Good times rolled, with sales of American whiskey reaching a whopping $5 billion in 2021, a near 20% jump since 2020. However, a pinch in pockets drove people to scale down their drinking, causing a wobble in 2024. Companies such as Brown-Forman even felt the sting, shedding around 700 employees in January.
Swonger cautioned that strapping spirits with these crippling tariffs will only slow down the industry further, impacting manufacturers and crop producers from coast to coast.
You might wonder, what's a whiskey with no Europe? Not a drop, as the old continent has been a significant swigger of US whiskey, with exports soaring a whopping 60% over the last three years to $699 million.
Trump's 25% tariff on all steel and aluminum imports kicked off this week, and boy, did the EU raise a glass in response! The EU targeted up to $28 billion worth of American goods, from boats and bourbon to motorbikes, to brew its retaliation, which commenced in April. Swonger called for peace between governments to bring back the good ol' days of zero-for-zero tariffs.
Last week, the CEO of Jack Daniel's whiskey maker, Brown-Forman, squawked about Canada's decision to remove American-made spirits from store shelves due to Trump's tariffs on Canada. Yet, the company can handle the losses since Canada accounts for only 1% of its total sales.
However, Eric Gregory, the president of the Kentucky Distillers Association, sounded the alarm about the far-reaching consequences of tariffs in his statement. With 95% of the world's bourbon hailing from Kentucky, "hard-working Americans—corn farmers, truckers, distillery workers, barrel makers, bartenders, servers, and the communities and businesses built around Kentucky Bourbon" are in the line of fire.
Shares of spirits companies took a nosedive in midday trading, with Brown-Forman dipping nearly 7%, Remy Cointreau sliding about 4%, and Diageo slipping nearly 2%. It looks like the spirits business is heading for some thunderous times ahead! Keep your glass half full! 🥃🌪️
- The US spirits industry braces for a slowdown as the EU's response to Trump's steel and aluminum tariffs includes a 50% hike in whiskey tariffs, a move that Swonger, CEO of DISCUS, called "deeply disappointing."
- The tariffs could further slow down the spirits industry, impacting manufacturers and crop producers from coast to coast, as stated by Swonger, who also pointed out that Europe has been a significant consumer of US whiskey, with exports soaring by 60% over the last three years.
- As the EU commenced its retaliation in April, targeting American goods worth up to $28 billion, including spirits, the spirits business seems to be heading for some turbulent times in the coming years, literally.
