New York
CNN
—
The US spirits industry is bracing for pain after the European Union targeted American whiskey in retaliation against President Donald Trump’s steel and aluminum tariffs.
The EU’s decision to spike tariffs on American whiskey to 50% is “deeply disappointing and will severely undercut the successful efforts to rebuild US spirits exports in EU countries,” Chris Swonger, CEO of the Distilled Spirits Council of the United States (DISCUS), said in a statement released Wednesday.
Ignited by the pandemic, sales of American whiskey have grown nearly 20% since 2020 — topping more than $5 billion last year, according to the council’s economic data. Sales of whiskey and other spirits softened, however, in 2024 as people dialed back their drinking amidst the rising cost of living. As a result, some companies, like Brown-Forman, laid off about 700 employees in January.
“Reimposing these debilitating tariffs at a time when the spirits industry continues to face a slowdown in US marketplace will further curtail growth and negatively impact distillers and farmers in states across the country,” Swonger said.
Europe is a growing and significant customer for US whiskey, with exports soaring over the last three years by 60% to $699 million after earlier tariffs were suspended, according to DISCUS.
Trump’s 25% tariff on all steel and aluminum imports started Wednesday. The EU responded to what it described as “unjustified” tariffs by announcing countermeasures on up to $28 billion of American goods, including boats, bourbon and motorbikes. EU’s retaliation starts in April.
“We urge the US and EU governments to come to a resolution that gets our spirits industry back to zero-for-zero tariffs,” Swonger added.
Last week, the CEO of Jack Daniel’s whiskey maker Brown-Forman blasted the decision by officials in Canada to pull American-made spirits off store shelves in response to Trump’s tariffs on Canada.
“That’s worse than a tariff because it’s literally taking your sales away,” Brown-Forman CEO Lawson Whiting said in an earnings call. However, he noted that Canada accounts for just 1% of the company’s total sales, so the company can “withstand” the losses.
But Eric Gregory, the president of the Kentucky Distillers Association, which represents the broader spirits industry in the state, drew attention last week to the wider impact from tariffs in a statement.
“Unfortunately, the return of retaliatory tariffs on American whiskey will have far-reaching consequences across Kentucky, home to 95% of the world’s Bourbon,” Gregory said.
“That means hard-working Americans – corn farmers, truckers, distillery workers, barrel makers, bartenders, servers, and the communities and businesses built around Kentucky Bourbon will suffer.”
Shares of spirits companies fell in midday trading, with Brown-Forman (BF.B) dropping nearly 7%, Remy Cointreau falling about 4% and Diageo (DEO) slipping nearly 2%