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(Bloomberg) — Europeans splurged on American spirits ahead of Donald Trump’s return to the White House and the potential for him to start another trade war.
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The value of shipments to the European Union rose about 40% to $1.2 billion last year, according to a report from the Distilled Spirits Council of the US, an industry trade group.
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The threat of new levies helped boost demand in America’s largest spirits export market as the industry saw global shipments gain 10% to a record $2.4 billion, the research said.
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But that growth has been tempered by Trump igniting a new round of trade disputes. The industry was just getting back on track from the president’s first term when EU retaliatory tariffs on American whiskey, the sector’s biggest export, caused global shipments to fall. Those levies were lifted in 2021, and exports have since rebounded.
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Last month, Canada, the second-largest market for American spirits exports, retaliated to US tariffs by imposing a 25% levy on US spirits. That coincided with most Canadian provinces removing US alcohol products from stores.
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The EU, America’s biggest spirits export market, had said it was going to bring back tariffs on American whiskey in response to US levies on steel and aluminum. But about two weeks ago, the EU dropped that plan to avoid threats from Trump to place 200% tariffs on European wine and champagne.
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Tracking Every Trump Tariff and Its Economic Effect
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That was a relief for US distillers, including Brown-Forman Corp., the maker of Jack Daniel’s. The EU accounts for about 20% of its net sales. The industry is concentrated in just a few states, with Tennessee and Kentucky accounting for more than half of all exports, according to the Distilled Spirits Council.
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The EU backing down is a good step toward “untangling spirits from these trade disputes,” said Chris Swonger, chief executive officer of the Distilled Spirits Council.
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English (US)