Trump tariffs deal a blow to America’s whisky distillers, shattering record growth-streak

Trump tariffs deal a blow to America’s whisky distillers, shattering record growth-streak

“Many small distillers have felt the effects since day one."

VicesFebruary 14, 2019 By Will Brendza

In 2017, America’s distilled spirits sales and exports rose to record heights. That year alone the industry exported $1.63 billion in American-made spirits, particularly, whisky. That was a notable 14.3 percent jump over 2016’s numbers, and in anticipation of an even better year in 2018, a lot of distillers were getting ready to pop the corks on some of the most expensive bottles in their liquor cabinets.

Then, the floor fell out from under them.

As a result of Donald Trump’s slapdash tariffs and inexplicable “trade war,” the whisky industry took a significant blow in 2018 after a string of record-breaking years. And if things don’t change soon, the situation could get even worse for America’s whisky makers, and its whisky drinkers, too. 

“For the first time, data can demonstrate the negative impact of retaliatory tariffs on what had been a booming export growth story,” Christine LoCascio, the Distilled Spirit Council's senior vice-president for international affairs, told CBC. “The tariffs are making it more difficult to be competitive in key markets.”

For the last 10 years whisky sales have been steadily rising and showed no signs of tapering off or abating. Places like Germany, the UK and Brazil couldn’t get enough of our boozy liquid gold. Driven by the mystical heritage of American whisky distilling, its versatility in cocktails and the authenticity of the product itself, supply was working hard to keep up with demand.

But, after levies against Mexico, Turkey, China, Canada and the European Union (the largest export market for American whisky) whisky exports dropped by a gnarly 8.7 percent between July and November of 2018 compared to that same period of time in 2017. It’s a tit-for-tat retaliation against Trump’s lunatic economic conduct. Countries with levies weighed against them, have responded by clapping their own “retaliatory tariffs” on American whisky.

Tariffs are starting to have a negative effect on exports,” LoCascio, said at a press conference. “Many of the small distillers have felt the effect [since] day one.”

On top of these retaliatory tariffs, Donald Trump’s “trade war” with China has directly made things harder for whisky distillers. By imposing tariffs on glass imports to the US, he is effectively cuffing distillers on both the import and export side of their businesses. Domestically, we do not produce much glass and distillers rely on a supply from China in order to keep bottling affordable.

Matt Dogali, the president and CEO of the American Distilled Spirit Association described the problem bluntly: “There’s not just excess glass production just lying around waiting to be capitalized on,” he told the Washington Examiner. Adding that, if Trump follows through on his threat to raise tariff rates from 10 percent to 25 percent, it will make things even more expensive for distillers who need glass bottles to sell their product. Those costs either have to be absorbed by the distillery, or they will be passed onto the consumers — the drinkers — The People.

And that’s when things will get real for American whisky drinkers. It’s one thing when American whisky is getting more expensive abroad, but when Donald Trump’s trade war starts hiking the prices at home, well, that’s how you start a whisky revolution.

Which, is not something this country is equipped to deal with right now. America has enough on it's plate already, without Trump dumping our snifters out.