Washington — The collapse of trade negotiations has left American distilleries “devastated,” facing hundreds of millions of dollars in lost sales, according to industry representatives. The failed talks mean tariffs on American whiskey will remain in place, further hurting distilleries, many of which are small and family-owned. The European Union’s 25% tariff on American whiskey has severely hampered exports, with US whiskey exports to the EU falling by 20% in the first half of 2024 compared to the same period in 2023.
The Distilled Spirits Council of the United States (DISCUS) estimated that the tariffs have cost the industry over $600 million in lost exports since 2018. Chris Swonger, president and CEO of DISCUS, said the industry is “devastated” by the outcome.
The tariffs, which were initially imposed in 2018, targeted a range of US goods, including whiskey and other spirits, in retaliation for US tariffs on steel and aluminum. The loss of sales is particularly acute for Kentucky bourbon producers, who rely heavily on international markets. The uncertainty surrounding the tariffs has already led to a decline in exports to the UK, which had been negotiating a separate deal but has not yet imposed its own tariffs.
Shift in Consumer Preferences
The tariffs have also led to a shift in consumer preferences in Europe, with some buyers switching to other spirits. This shift, combined with the decline in exports, has resulted in a significant economic impact on the industry, with distilleries having to cut back on production and investment. The $600 million in lost exports highlights the significant impact of the tariffs on the industry.
The collapse of the talks means this figure is likely to continue to grow, with no immediate solution in sight.
Looking Ahead
The industry is now looking to Congress and the administration for relief, but no immediate solution is in sight. As the situation continues to unfold, the administration will face pressure to find a solution to the tariff disputes and support the struggling distilleries. The administration will need to navigate the complex trade relationships with the European Union and the United Kingdom to find a way to remove the tariffs and restore exports.
The situation will be closely watched in the coming weeks and months, as the industry waits for a resolution to the tariff disputes and a potential rebound in exports. With the tariffs remaining in place, the industry will continue to face significant challenges, and the administration will need to take action to support the distilleries and restore the industry to its former strength.
