During Donald Trump’s presidency, a series of trade tariffs introduced as part of a broader protectionist policy agenda had significant ripple effects across various sectors of the U.S. economy. Among the industries affected, American whiskey—particularly bourbon—became an unexpected victim of international trade retaliation. This essay outlines how these tariffs disrupted production, exports, and long-term market dynamics for American whiskey producers.
In 2018, the Trump administration imposed tariffs on imported steel and aluminum, citing national security concerns under Section 232 of the Trade Expansion Act of 1962. The European Union, a major trading partner, responded with retaliatory tariffs on a range of American goods, including a 25% tariff on American whiskey. The EU specifically targeted bourbon and other spirits due to their cultural and economic ties to states like Kentucky, a region seen as politically influential.
The immediate impact of the tariffs was a sharp decline in exports. According to the Distilled Spirits Council of the United States, American whiskey exports to the EU fell by over 35% between 2018 and 2020. Before the tariffs, Europe had been the largest export market for American whiskey, making up nearly 60% of total exports. The sudden drop in demand forced producers to scale back shipments and rethink their international strategies.
Small and mid-sized distilleries were particularly vulnerable. Unlike large multinational producers that could shift focus to other markets, smaller firms often relied heavily on EU sales and lacked the infrastructure to expand elsewhere. This led to reduced production, deferred capital investments, and in some cases, job losses. The tariffs also created uncertainty that disrupted long-term contracts and distributor relationships in Europe.
Beyond immediate financial impacts, the trade dispute complicated brand-building efforts overseas. Whiskey is a long-aged product, and producers typically plan distribution strategies years in advance. With tariffs in place, distillers faced a difficult choice: absorb the cost of the tariff, raise prices in European markets, or halt exports entirely. Each option had implications for competitiveness and brand perception abroad.
Efforts to resolve the trade dispute began in the final months of Trump’s presidency and continued under President Joe Biden. In October 2021, the U.S. and EU reached a deal to suspend tariffs on steel and aluminum, which included a suspension of the whiskey tariffs starting in 2022. While this move restored access to European markets, industry experts noted that regaining lost market share would take time and investment.
In summary, tariffs implemented during the Trump administration—intended to protect domestic industry—triggered a chain of retaliatory measures that hurt American whiskey exporters. The policy’s effects were especially severe for smaller producers and had long-term implications for global competitiveness. Although the situation has since improved, the episode remains a case study in the unintended consequences of trade wars on niche but globally connected industries.
