Bourbon Exports at Risk? Experts Say Tariffs Could Devastate the Spirits Industry

U.S. Representative Morgan McGarvey (D-KY) speaks at the U.S. Capitol in July 2023. McGarvey spoke out against tariffs and their impact on the spirits industry at the 2025 DISCUS Conference. (Photo by Michael Brochstein/Sipa USA)(Sipa via AP Images)

A panel at the DISCUS Annual Conference 2025 shed light on the critical issue of tariffs and their far-reaching consequences for the spirits industry. Industry leaders and policymakers voiced concerns about the economic damage that retaliatory tariffs have historically caused and warned against future tariff policies that could threaten American jobs and exports.

Retaliatory Tariffs and Their Devastating Effects on American Whiskey

Democratic Kentucky Congressman Morgan McGarvey, a co-chair of the Bourbon Caucus, emphasized the real and immediate dangers tariffs pose to the American spirits industry. He pointed to recent history — retaliatory tariffs against President Donald Trump’s tariffs during his first administration — as evidence of the potential damage.

“In my district, bourbon whiskey exports were cut in half. Exports were cut in half. It’s not a guess. This is what happened. That was on a 25% tariff. So a proposed retaliatory tariff of 50% is really, really dangerous,” McGarvey said during a panel at the conference.

The European Union announced in March it would impose 50% retaliatory tariffs on American goods including bourbon, motorcycles, beef, poultry and peanut butter, with the next wave expected include American wine, gin, liqueurs and coridals.

“Jobs are at stake. Prices will go up. In Europe and in the United States. The European Union must act to protect consumers and business.” European Commission President Ursula von der Leyen said at the time. “The countermeasures we take today are strong but proportionate. As the US are applying tariffs worth $28 billion, we are responding with countermeasures worth €26 billion.”

McGarvey outlined the cascading impact of these tariffs, which extend beyond producers to workers across the supply chain.

“[Tariffs are] the current thing that’s going to devastate the economy. We’re talking everybody from the farmers who put the corn in the ground, the coopers who put the bourbon in the barrel, the union workers who put it in the bottle, the people who drive it to the store and people who work at the store, the people who work in industries associated with bourbon tourism, the people who work at restaurants,” he said. “This is the kind of impact it’s going to have on American jobs.”

A History of Economic Damage

Denzel McGuire, chief of federal & state government relations at DISCUS, echoed McGarvey’s concerns, citing the tangible effects of past tariffs.

“We’re an industry that actually knows what happens when we’re tariffed. It’s not a mystery. And one of the stats that we use is that when the EU placed retaliatory tariffs — again, they didn’t initiate it; they put retaliatory tariffs on American whiskey back between 2018 and 2021 — exports to the EU, which is our largest export market, dropped by 20%.”

McGuire pointed out the sharp contrast in trade patterns once these tariffs were lifted.

“When the Biden administration could resolve the tariff issue, that number went from a plunge of 20% to a surge of 60%. A 60% surge in exports! So, it’s a tale that we’re trying to get out to as many people as possible.”

Misguided Tariff Policies and Their Consequences

While some tariffs are strategically implemented to incentivize domestic production, McGarvey warned against blanket tariffs that harm American industries.

“Let’s put a tariff on a couple of places, on these particular products, to further incentivize the buying and manufacturing here in the United States. I think that’s a good use of a tariff,” he explained. “Hypothetically, a bad use of a tariff would be to say we’re putting a tariff on everything that our allies and trading partners do. Why? Because we can. That’s not a great use of tariff.”

He emphasized that the result of such policies would be immediate retaliatory tariffs, with American spirits — especially whiskey — being among the first to suffer.

McGarvey also pointed out that thanks to the nature of the spirits industry, certain products must be produced in specific regions, making tariffs particularly harmful for imports and exports alike:

“If you want to make bourbon, it has to be made in America. So, you’re not going to incentivize the further manufacturing of bourbon by a tariff. It’s already here; it has to be here. Similarly, as you all know, to be 100% agave tequila, it has to be made and bottled in Mexico. So, my spirits companies that are headquartered and employ a whole bunch of people in Louisville, Kentucky, are going to [face] tens of millions, if not hundreds of millions of dollars in tariffs on the tequila they’re bringing in and selling, and all the jobs that supports.”

He further stressed that this extends beyond bourbon and tequila to other imported spirits like champagne, which must be produced in France. “You’re not going to be incentivizing manufacturing those spirits here in the United States by these tariffs. So, there’s an import aspect here as well for the spirits industry.”

The Industry’s Call for Strategic Trade Policies

Speakers at DISCUS 2025 made it clear: Past tariffs have already demonstrated their harmful effects on the spirits industry. With American whiskey exports having once been slashed by half and EU retaliatory tariffs causing a 20% drop in exports, industry leaders are urging policymakers to approach trade policies with caution.

As the possibility of new tariffs looms, the spirits sector remains committed to advocating for trade policies that protect jobs, encourage economic growth, and ensure the continued global success of American whiskey and other spirits.