Bourbon is a quintessential American product. But the industry could soon be drawn into a global trade war.
That’s because it has been placed on a retaliatory tariff list drawn up by the European Commission.
It comes after the Trump administration imposed import tariffs on steel and aluminum.
CGTN’s Dan Williams reports.
The state of Kentucky is home to 95 percent of the U.S. bourbon industry, and the latest developments are causing concern.
Rapid growth over the last decade has seen the trade boom in value and it is now worth $8.5 billion to the U.S. state.
But those gains could be under threat, if the European Commission follows through on the threat of retaliatory tariffs.
Evan Thurmond of ‘The Bourbon Society’ is among those concerned.
“Global trade is important and should be more open versus penalizing people,” Thurmond saids. “It’s just unnecessary I think to play political games with it. It means a lot to people. It means a lot of jobs.”
It is estimated that 17,500 hundred jobs are generated by the industry in the state.
Last year, more than 1.8 million barrels were filled with bourbon, the most since 1967.
“You are obviously concerned that when you impose tariffs on products and you produce a lot of that product,” Kenneth Troske from the Gatton College of Business and Economics said.
“There are lots of ways that can negatively affect you. Certainly Europe is important. Asia is going to be more important. If I were in the Bourbon industry, alarm bells would be going off.”
That view is backed up by Kaveh Zamanian, founder of Rabbit Hole distilling.
“I certainly think that for the larger players that have for the last few years increased their capacity,” Zamanian said. “I think it will also likely trickle down to smaller players as well just from the stand point of our production capacity.”
Marianne Barnes, the first female master distiller at Castle & Key hopes that the industry pushes ahead with expansion plans, regardless of tariffs.
“I know it will cut into the margin and may make it harder for the smaller brands to get out there,” Barnes said. “I hope that it doesn’t deter people from getting their spirits out to other markets.”