Tariffs Hit American Whiskey Exports Even Worse Than Previously Reported, Industry Group Says

Last month, the trade group the Distilled Spirits Council offered a dire look at how President Trump’s trade war appeared to be affecting exports of American whiskey. At the time, despite showing growth through the first six months of 2018 — a 28 percent increase year-over-year for U.S. whiskey exports — the council said that, for the next five months after retaliatory tariffs levied by other countries kicked in, exports were actually down 8.2 percent. Now, the Distilled Spirits Council has tallied the results for December and is back with a full-year report — allowing us to compare apples to apples on the first and second halves of the year. Turns out the holiday season wasn’t any brighter for American whiskey producers.

Despite American whiskey export sales of $595 million through the end of June, for the second half of 2018, sales were just $593 million — an 11 percent decline year-over-year. Not only does that mean that last year saw a dramatic double-digit gain abruptly turn to a double-digit loss, but the council also notes that spirits exports are typically “much higher” in the second half of the year, which the trade group says is a clear sign of “the harm the tariffs have caused.”

When looking at all 12 months, American whiskey exports were still worth a record $1.18 billion — but that’s only a 5.1 percent annual gain compared to 2017’s growth of 16 percent from the year before.

Based on these numbers, American whiskey was on a hell of a run that was stopped pretty much dead in its tracks and Distilled Spirits Council President and CEO Chris Swonger thinks he knows why. “With the full year data in hand it is clear that the retaliatory tariffs are having a significant and growing impact on American Whiskey exports, which had been a bright spot for U.S. agriculture exports,” he said announcing the new figures. “The damage to American Whiskey exports is now accelerating, and this is collateral damage from ongoing global trade disputes.”

The council points out that this “whiplash” was especially dramatic in the EU. Once the block of countries introduced 25 percent retaliatory tariffs midyear, exports switched from 33 percent growth in the first half of 2018 to a 13.4 percent decline.

For the record, Swonger does admit that “some portion of the front-end growth is attributable to larger producers positioning product in foreign markets ahead of the tariffs;” however, he also called for change. “With our member companies, we have worked for many years to promote American Whiskeys in key export markets,” he stated. “As a result, their popularity has been skyrocketing. We urge policy makers and our trading partners to rapidly address these retaliatory tariffs before more damage is done to what has been a great American trade success story.”