How Biden and the Senate can help a tariff-burdened whiskey industry
But covid isn’t our only problem. We also face a continuing crisis caused by the Trump administration’s trade war with the European Union and United Kingdom, which in 2018 resulted in a 25 percent tariff on American whiskey.
Before the tariffs, my business’s exports to the E.U. and Britain were climbing by 25 percent every year. Now they’ve dropped by 60 percent. It could get much worse soon: The tariffs are set to double in June.
With the clock winding down, it’s critical that the Senate confirm President Biden’s nominee for U.S. trade representative, Katherine Tai, as soon as feasible, so she can get to work deescalating tensions. Every day the Senate waits is another day closer to irreparable damage for hundreds of U.S. craft distilleries such as ours. Whiskey was exported from 37 states last year, including New York and Kentucky — states that are home to a couple of influential senators.
They need to understand how devastating these tariffs have been. I feel their impact every time I’m on the phone with a foreign distributor who tells me that, regrettably, U.S. brands have become too costly and too plagued by uncertainty to take on or expand. This erodes years’ worth of effort by our team to get onto European shelves. The longer we’re off these shelves, the harder it will be to get back on them.
With America’s reciprocal tariffs in place, distillers in the E.U. and the U.K. are feeling the same struggle when selling in the United States. That’s why British international trade minister Liz Truss, the week before Biden had even been inaugurated, requested a meeting with Tai as soon as possible to discuss tariffs on Scottish whisky. The Senate has plenty on its schedule, but moving on the Tai confirmation is essential to getting these talks started and undoing these business-killing tariffs. The talks will take time.
If the Biden administration isn’t given sufficient runway to solve the dispute, the doubling of the tariffs four months from now could be the final blow for craft distillers who have spent years building their businesses in the E.U. and Britain. It would hurt people up and down our supply chain, from the organic farmers who grow our ingredients to the diverse team of workers who distill, package and transport our products. An analysis by the Distilled Spirits Council trade group estimates that the U.S. tariffs, if left in place, could ultimately cost more than 32,000 American jobs.
The tariffs are also rapidly reversing what had been a surge of interest in American whiskeys among European consumers. It was heartwarming to experience when — before the pandemic, before the tariffs — I hosted booths at European trade shows and people always noticed the words “Distilled in Chicago” stamped on our labels. That led to conversations about everything from the Chicago Cubs to the Midwestern ingredients we use. When Europeans chose to purchase from us, they were buying American. There is a bit of soft diplomacy in every glass of American whiskey raised abroad.
Spirits are about celebration, and there is nothing worth toasting in the Trump tariffs. It’s all the more frustrating that the trade war didn’t even begin with targeting the spirits industry. We were just collateral damage in a dispute that began over steel, aluminum and aviation manufacturing. Wine, cheese and denim jeans have also been caught in the crossfire.
I have high hopes that, as U.S. trade representative, Tai will be able to get the distilled-spirits sector out of the tariff battle and back on a path to prosperity. But first she must be allowed to get to work.
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