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An escalating international trade spat is threatening to cut into profit from the export of US whiskey to Europe, just as business is booming, according to Reuters.

U.S. President Donald Trump on June 1 imposed tariffs for aluminum imports from Mexico, Canada and the European Union. As a result, Spiegel expects his bill for recently-ordered steel fermentation tanks, worth several hundred thousand dollars, to be $50,000 to $60,000 higher.

With nearly a quarter of sales coming in Europe, lowering prices enough to offset the entire tariff would be too stiff a drink given total revenue only amounts to a few million dollars a year.

Bourbon, which can only come from the United States and is often sweeter than Scotch, has been growing beyond its home state, due in large part to a resurgence of cocktail culture.

Exports grew 43 percent to $1 billion over the past decade, according to the Distilled Spirits Council. About 59 percent of exports went to the EU last year.

To meet rising demand and interest, many whiskey producers are expanding, with the help of last year’s massive U.S. tax cut that lowered federal excise tax on distillers from $13.50 to $2.70 per gallon for the first 100,000 gallons - but only for two years.

 

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