New Steel Tariffs Could Have Big Consequences For Bourbon and Orange Juice
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As part of its reassessment of current trade deals, the Trump administration has its eyes set on a steel import tariff, one that, should the United States impose it, would likely cause Europe to hit back—targeting the bourbon whiskey industry, among others.
First, President Trump has long threatened to impose tariffs meant to hurt China. But the steel tariff—his latest focus—would hurt Europe, too, because allies such as Germany also provide steel to the U.S. And the European Union doesn't plan on taking this proposed tariff sitting down. According to a report in The Financial Times, the EU would strike back by imposing their own tariffs—on dairy, orange juice, and whiskey.
Now, second, bourbon is only produced in the U.S., and European countries buy a lot of it. In fact, the EU bought about 59 percent of bourbon exports last year alone, data from the Distilled Spirits Council of the United States shows. Without those sales, the bourbon whiskey industry—which is based in Kentucky—could seriously suffer.
"Over the past 10 to 15 years, export markets have become increasingly important," Eric Gregory, president of the Kentucky Distillers' Association, told WFPL. And, "anything … that impacts Kentucky bourbon affects a lot of different industries."
Distillers' Association numbers show that the Kentucky bourbon industry has more than 17,000 employees and impacts the U.S. economy by $8.5 billion, WFPL says.
You can start to see why the bourbon whiskey industry is worried. And consumers should be worried, too. In an online statement, the Distilled Spirits Council promised consumers—as well as producers—would be hurt by the tariffs imposed by the EU
"U.S. and EU spirits exporters have enjoyed duty-free access to each other's markets for more than two decades, which has greatly benefited both spirits producers and consumers and resulted in increased exports, jobs, and consumer choice," the council wrote online. "Any efforts to impose retaliatory tariffs on U.S. spirits exports to the EU will harm consumers, producers, and the U.S. and EU spirits sectors."
But before you go buying out all of Kentucky's bourbon, remember: President Trump has yet to impose a steel tariff, so the EU has no reason to impose its own tariff—yet.
