The ripples from Donald Trump’s disastrous trade war continue to spread across American businesses, with many hoping President Joe Biden’s meetings with other G-7 leaders breaking a stalemate in the battle.
No industry exemplifies the struggles of American businesses to see their products overseas than bourbon distillers, as CNN reports. As Trump touted his tariffs on imported goods would cripple the French wine and Scotch whisky imports–along with German cars and Chinese steel–foreign countries were taking their countermeasures, including tariffs of their own on Kentucky-made bourbon.
Unlike many other products, bourbon cannot be made on demand. The distilling and aging process takes years, so pre-establishing distribution networks and purchases are key to making a single batch profitable–versus having it sit in a warehouse for years.
“When we fill barrels of whiskey today here we’re making plans for what we do with them in four years. And we made plans and projections based on stocks put away for Europe that are not going to come to fruition,” added Amir Peay, an entrepreneur and history buff who resurrected the James E. Pepper label.
European markets slapped a 25% tariff on bourbon, which was just getting a wider following in Europe in the mid-2010s among an audience taken with Irish whiskey and Scotch. “We’re still on death row,” Peay said.
Foreign countries knew that targeting bourbon would have a dual impact: hit US exports and specify the state of Mitch McConnell, the then-Senate Majority Leader who supported Trump’s trade wars.
Trump’s tariffs continue to wreak havoc on the construction industry, as the cost of steel and other materials have skyrocketed in the US. At this point in his Administration, President Joe Biden hasn’t lifted the tariffs, and there’s some question he would, given his efforts to promote American workers and products.
However, agreements on smaller-valued items, like wine and whiskeys, could ease up some of the issues that led to a 30% decrease in bourbon exports. And people like Peay hope Biden can get his European counterparts to agree.