President Trump’s lingering trade wars are about to soak American whiskey makers even as the rest of the US booze industry celebrates a recent lifting of tariffs on wine, vodka and rum.
Major US whiskey brands — from Woodford Reserve to Jim Beam and Maker’s Mark — have been on the rocks since 2018 over massive 25 percent tariffs imposed on their sales to Europe and the United Kingdom — thanks to a Trump-era war on steel and aluminum imports.
Now, even as the Biden administration works to rebuild US trade relations with Europe and the UK, tariffs on US whiskeys are poised to double on June 1 to 50 percent. Distillers say their sales to Europe, a key market for whiskey, will be put on ice indefinitely if that happens.
A 50 percent tariff would make us “so uncompetitive with a $30 bottle in the US costing 60 euros, that I won’t be able to ship product to Europe anymore,” Michael Langan, general manager of Yellow Rose Distilling of Houston, told The Post.
Yellow Rose’s shipments to Europe fell by fivefold to just 1,000 cases last year as a result of the tariffs, Langan said. If the 50 percent tariffs kick in, his US exports to Europe will fall to zero, he said, and bouncing back will be tough.
“American whiskey is losing market share and shelf space in Europe to competitors from Japan and Asia who are taking our place,” Langan lamented.
US whiskey exports to Europe were on the rise before the tariffs went into effect, up 28 percent for the first six months of 2018, according to the Distilled Spirits Council of the United States. Since then, however, US whiskey exports have fallen by 37 percent to Europe and 53 percent to the UK, the trade group said.
Among those suffering are Brown-Forman, the maker of Jack Daniel’s, which has been absorbing much of the added costs in an effort to not lose market share — suffering profit margin declines in the process.
But even a company like Brown-Forman, which also makes Woodford Reserve and Finlandia vodka, finds the impending 50 percent tariff hard to swallow.
“At a tariff rate of 25 percent, we decided to shield our European customers … whenever possible,” Chief Executive Lawson Whiting told Politico on March 11. “Everyone can imagine that, at a rate of 50 percent, suddenly that shielding becomes much more difficult.”
Brown-Forman is headquartered in Kentucky, the birthplace of bourbon, a type of whiskey that relies heavily on corn for its distinctive sweet flavor. Kentucky is also the home state of noted Trump ally Sen. Mitch McConnell, which is a big reason the whiskey industry was targeted by European trade representatives in the first place, experts said.