WASHINGTON, D.C. — Whiskey Bar owner Bill Thomas described the situation American bourbon and whiskey distillers are facing as "catastrophic," caught up in a Trump-era tariff dispute for the past several years with no clear end in sight.
What You Need To Know
- The EU and UK's whiskey and bourbon tariffs are set to double in June
- The increase could crush American distilleries
- Kentucky produces 95% of the world's bourbon supply
- Democrats and Republicans are calling on the Biden administration to remedy the situation
"American whiskey is not being drunk abroad. Exports are down considerably. Small distilleries that made inroads into European markets, all of that capital that they used to open those doors, all of that has been eroded," said Thomas, owner and founder of Jack Rose Dining Saloon.
"With their initial cash investment and the lack of the opportunity to sell in Europe, we could see many of these distilleries going out of business over the next year or two if these tariffs aren't lifted," he warned.
People travel from all over the world to Thomas' Washington-DC based bar, voted Whiskey Bar of the Year in 2020 by the American Whiskey Magazine. Thomas works with distilleries both small and large and said the trade war and the pandemic combined have been crushing.
"It’s a passion. Some of them left a more lucrative career to begin these small distilleries," Thomas said.
That's why Republicans and Democrats wrote to the Biden administration's newly-confirmed U.S. Trade Representative (USTR) Katherine Tai asking her to work with her European counterparts to permanently lift the tariff burden. It's a holdover dispute from the Trump era.
"The administration only can do it. Congress has no power to act here. The background is pretty simple. Trump started imposing tariffs on the EU. Then the EU retaliated by placing a tariff on bourbon imports into the EU. The bourbon industry has put thousands and thousands of barrels of bourbon into aging barns with the anticipation of increasing foreign demand and so this is an investment they have already made, that they are continuing on to make and it’s their major growth opportunity," said Rep. John Yarmuth (D-Ky.), who co-chairs the Congressional Bourbon Caucus with Lexington Republican Rep. Andy Barr.
Members of the Bourbon Caucus say millions of American jobs rely on free and fair trade between the US and the European Union. The current 25% EU and UK tariff on American whiskey that has been in place since June of 2018 is set to double to 50% on June 1st.
"We’ve got an 8 billion dollar industry in Kentucky right now. That is one of the great growth stories in Kentucky, the great success stories and that affects everybody," Yarmuth said.
"Just 15 short years ago, there were only ten major distilleries in America. Now it is in the hundreds and most of that is dotted across the US in small towns and communities that really have their local market, tourism, but they also have an international clientele for all of the new styles of bourbon, all of the new flavors that they are putting out," Thomas said.
While some tariffs have been temporarily suspended as the Administration works to resolve an ongoing WTO aircraft dispute, the Caucus is urging the administration to work with European entities to remove all tariffs.
The USTR could not be reached for comment.