The Bottom Line on Bourbon Tariffs

The Bottom Line on Bourbon Tariffs

Things have been heating up this summer —literally with these hot days and between the bourbon industry and Washington D.C.

In case you have not heard, Trump’s trade war is hitting a little too close to home for a lot of us here in Kentucky.

Let me break it down for you…

Trump is slapping the European Union, Canada and Mexico with 25% tariffs on imported steel and 10% on aluminum. Now the EU is stating that they are going to put tariffs on U.S. imports which includes bourbon.

In recent years, bourbon hasn’t only been booming across the United States but also has taken off overseas. In 2010, National Bourbon Day reported that export sales were increasing rapidly and up 286% in France alone. From 2011 – 2015 premium bourbons rose 28.8% over in the EU. As you can see a lot of the bourbon boom over the past few decades have included the overseas sales.

Now that you are up to speed, let’s check out what that means for our bourbon state. “Kentucky produces 95 percent of the world’s bourbon, an industry that employs 17,500 in the state with an annual payroll of $800 million, according to the distillers association.”

With bourbon taking years to make and Europeans being still fairly new to the bourbon drinking club, distilleries are worried that with the increase of the price will significantly decrease the bourbon drinkers over time and once the bourbon that is now in the barrel is ready the demand will not be there. This means small craft distilleries might not make it or will have to cut their staff.  The big players (think Jim Beam, Makers Mark, etc) should be able to make it through this but are concerned that there might be some layoffs in the future. Not only is this affecting the EU but also Canada and Mexico. Since bourbon has to be made in the United States, there is no option to consider moving the distilleries somewhere else (what a nightmare that would be!).

Only time will tell what is going to happen and the effects it will have here in Kentucky.  In the meantime, I know I will continue to support the bourbon industry (aka just keep drinking) & hope for the best.

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