Global Tariffs Slash Kentucky Bourbon Exports by 35% in 2020, Per KDA

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Tariffs imposed on U.S. spirits due to international trade disputes slashed the exports of Kentucky Bourbon by 35% overall in 2020, the Kentucky Distillers’ Association announced. Shipments to the European Union fell by nearly 50%.

The EU is expected to double the tariffs imposed on American whiskey, which would only make the situation worse for Kentucky distillers. According to a KDA news release, the EU had traditionally been the state’s largest international market, accounting for 56% of all exports in 2017, compared with about 40% currently.

KDA president Eric Gregory has already called for the Biden administration to work with overseas counterparts to eliminate the tariffs and to solve the trade disputes. Congressman John Yarmuth has led efforts among members of Congress calling on the previous administration to work to end the dispute and provide certainty to Kentucky’s distilled spirits industry.

Bourbon grew its exports 98% between 2010 and 2017, and in turn, distilleries invested billions of dollars in capital improvements. But in 2018, the U.S. imposed a 25% tariff on steel and aluminum from the EU, prompting a return tariff of 25% on American Whiskey and other goods, which “has escalated into tit-for-tat tariffs” on other spirits, per the KDA release.

Some of the results of the tariffs, per the KDA, include:

  • Total exports of Kentucky Bourbon and other whiskies were valued at $455 million in 2018. That number plunged to $319 million in 2020, a 35% decrease.
  • Export values to the EU have nosedived 48% since the tariffs took effect, from $257 million in 2018 to $135 million last year.
  • The United Kingdom had historically been the largest market within the EU for Kentucky whiskey, making up a quarter to a third of exports. Sales have plummeted from $67 million in 2018 to just $33 million last year, a 50% drop. The largest EU export country now is Spain at $49 million.

“Our signature Bourbon industry has sustained significant damage for more than two years because of a trade war that has nothing to do with whiskey,” Gregory said. “And it will get much worse if we can’t deescalate this dispute.”

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