President Donald Trump's recent announcement of global tariffs could have a profound impact on sellers and purchasers of alcoholic drinks.
Chris Swonger, CEO of the Distilled Spirits Council, said American distilled spirits have historically been exported to 51 markets around the world without tariffs. With President Trump implementing a minimum of 10% tariffs on all imported goods, other nations are expected to retaliate by placing tariffs on products exported from the U.S.
This could make things more challenging for spirits makers.
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"Our industry is unique because we're an industry of distinctive products," he said. "You can only make American whiskey right here in the United States, and the same goes for tequila in Mexico, Canadian whiskey in Canada, scotch in Scotland, Irish whiskey in Ireland, and cognac in the Jarnap regional frame. So we're a unique industry that is very intertwined."
The ability to export without being charged a tariff is an opportunity for businesses to grow, he said.
"The other thing that we're helping the Trump administration understand is that just over 20 years ago, there were only 60 distilleries in the United States, and now there are over 3,100," he said. "Many of them are mom-and-pop distilleries and craft distilleries sprinkled throughout communities all across the country. One of their greatest growth opportunities is to be able to export and drive revenue to many of our great trading markets."
He noted that the U.S. and the European Union had zero tariffs on alcohol from 1997 through 2018. As the European Union imposed retaliatory tariffs on the U.S. from 2018 through 2021, American whiskey exports to the EU declined by 20%.
Once the Biden administration worked with the EU to lift tariffs in 2021, exports of American whiskey to the EU increased by 60%.
The Distilled Spirits Council states that the industry supports 1.7 million jobs across production, distribution, hospitality, and retail.
