LOUISVILLE, Ky. (AP) — Kentucky Gov. Andy Beshear, a Bluegrass State bourbon industry leader and a Louisville-based spirits producer are applauding an agreement between the United States and the European Union to lift tariffs on bourbon and whiskey.
The United States and European Union have been in a trade war since 2018, when the former imposed a 25% tariff, or tax on imports, on European steel and a 10% tariff on aluminum under then-President Donald Trump. The European Union retaliated with tariffs on American products, including a 25% on American bourbon whiskey.
That tariff on a major Kentucky product was set to double on Dec. 1. But now, for bourbon producers, “it’s time to raise a glass,” according to Kentucky Distillers Association President Eric Gregory.
National Security Adviser Jake Sullivan, U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo announced an agreement Saturday in which the United States will allow some quantity of European steel and aluminum to come to the country without tariffs, and, in turn, the European Union will drop its retaliatory tariffs.
Gregory said Saturday that “these unfortunate tariffs have slashed exports of Kentucky Bourbon by 50% to the E.U. and the United Kingdom, costing distillers, industry partners and farm families hundreds of millions of dollars.”
Per Gregory, Kentucky bourbon exports had seen double-digit growth for a decade prior to the tariffs being imposed in 2018.
“Bourbon is one of Kentucky’s most historic and treasured industries, a $8.6 billion economic and tourism engine that generates more than 20,000 good-paying jobs each year with a $1 billion payroll and welcomes nearly 2 million people a year to the KDA’s world-famous Kentucky Bourbon Trail experiences,” Gregory said, adding that Kentucky currently has a record 10.3 million barrels aging.
He added: “The KDA thanks the steadfast leadership of the Biden administration, Kentucky Gov. Andy Beshear, Congressman John Yarmuth and officials in Europe for their tireless efforts to resolve this ongoing trade dispute and to restore fairness in overseas markets for Kentucky’s signature distilled spirits industry.”
Beshear tweeted Sunday that the agreement between the United States and the European Union is “great news.”
“Thank you to @SecRaimondo and the Biden administration and all those who helped make this win a reality for the commonwealth,” Beshear wrote.
During a press conference Monday, Beshear said that the deal is “going to prevent a catastrophic 50% tariff” on bourbon.
“These things were retaliatory,” Beshear said. “They were hitting bourbon harder than anywhere else because we can’t move production offshore like other companies were going to be able to do with other products.”
Lawson Whiting, the president and CEO of the Louisville-based Brown-Forman Corp., which produces bourbon brands like Old Forester, said Sunday that the company “looks forward to the return of a level playing field on January 1, 2022, and continued international growth for American Whiskey.”
The news certainly gave Brown-Forman investors more confidence. As of Monday afternoon, Brown-Forman’s stock (NYSE: BF.B) traded at more than $70 per share for the first time since mid-September.
While happy with the tariff drop from the European Union, both Whiting and Gregory are urging the United Kingdom to drop its 25% tariff on bourbon.
“With the suspension of the E.U. tariffs, we urge leaders from both the U.S. and U.K. to resolve their own tariff dispute so our legendary distillers can return at long last to doing what they do best – crafting the finest Bourbon for all the world to enjoy,” Gregory said.