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Trump tariffs ‘will harm’ Bourbon industry

The spirits industry has hit out at the Trump administration’s decision to impose punitive tariffs on steel and aluminium imported into the US, meaning American whiskey could be under threat.

Bourbon is a US$8.5 billion industry in Kentucky, according to the Kentucky Distillers’ Association

Yesterday (31 May), Trump made the decision not to exempt the EU, Mexico and Canada from tariffs of 25% for steel and 10% for aluminium.

In March, the White House announced a temporary exemption for the EU and six other countries – Argentina, Australia, Brazil, Canada, Mexico and South Korea, which came into effect on 23 March. The temporary exemption lasted until 1 May.

EU officials had previously suggested that retaliatory measures could affect agricultural products from the US, including American whiskey.

A number of trade groups have expressed their concern at the potential consequences of the decision.

Eric Gregory, president of Kentucky Distillers’ Association, said: “The Kentucky Distillers’ Association has long been an advocate of free and fair trade which has catapulted our legendary craft into an unparalleled chapter of global success.

“Bourbon is a thriving US$8.5 billion industry in Kentucky, generating 17,500 jobs with an annual payroll of US$800m. Spirits production and consumption pours more than US$825m into federal, state, and local tax coffers every year.

“We remain hopeful that continued negotiations will avoid a costly trade war and protect our allies and partnerships around the world, which will continue to benefit spirits producers and consumers for years to come.”

The Distilled Spirits Council also issued the following statement: “We hope the United States and its trading partners can resolve their differences without subjecting US whiskey exports to retaliatory tariffs.

“A trade war will harm consumers, the hospitality sector, small businesses and US farmers that grow the grains used to produce iconic US whiskeys that are enjoyed around the world.”

Spirits Europe said the decision has opened an “unfortunate chapter in the relationship between two major complementary trading blocs, but also diminishes predictability of the global trading system overall”.

The group praised the efforts that the European Commission and member states have put in to “avoid the situation” and encouraged them “to continue engaging with the United States”.

“We fully support all efforts to avoid further escalation in the global trading environment. The next few days are critical,” said Ulrich Adam, director general of Spirits Europe.

“We trust the European Commission and member states will agree on a balanced and proportionate response that both defends Europe’s interests and avoids further escalation of tensions.”

In 2017, more than 23 million nine-­litre cases of American whiskey were sold in the US, generating more than US$3.4bn in revenue for distillers, according to the Distilled Spirits Council.

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