Exports of American-made spirits hit a record high last year. However, a hangover is about to hit the industry as tariffs threaten to stunt growth, a leading industry group warned. Exports hit a record $2.4 billion in 2024, according to the Distilled Spirits Council of the United States (DISCUS). In a report released Thursday, the trade group said that last year’s growth is thanks to a rebuilt trading relationship between the US and the European Union. Exports to the EU jumped 39% in 2024 compared to a year prior — a gain put in peril by President Donald Trump’s trade war. “Unfortunately, ongoing trade disputes unrelated to our sector have caused uncertainty, keeping many US distillers on the sidelines and curtailing sales growth,” said DISCUS President and CEO Chris Swonger in a release. American-made whiskey in particular stands in the crosshairs of the trade dispute. The EU had removed tariffs on US whiskey in 2022. Since then, exports from the US to the EU have jumped nearly 60% to $699 million, according to data compiled by DISCUS. The EU was set to levy new tariffs on American whiskey this month, but delayed them after Trump announced a 90-day pause on the so-called retaliatory tariffs against most other nations. Swonger called the pause a “positive first step toward getting the US-EU spirits sectors back to zero-for-zero tariffs and untangling spirits from these trade disputes.” EU tariffs would be a major blow for American distillers and spirits makers. The bloc is the largest export market for US-made spirits, accounting for about half of all US spirits exports, worth $1.2 billion last year, DISCUS said. But it’s not just the EU. Canada is the second-largest recipient of US-made spirits, totaling $221 million last year. Canada’s 25% retaliatory tariff on all US spirits that began last month, and the subsequent removal of many American brands from Canadian liquor stores, is causing uncertainty in this year’s outlook with the country, DISCUS said. Tariffs aren’t the only problem major spirits makers are dealing with. A decrease in demand following a pandemic-induced boom caused US exports of spirits to the rest of the world to drop by nearly 10%, DISCUS said. That has resulted in layoffs at major distillers, such as at Woodford Reserve and Jack Daniel’s parent company Brown-Forman, and bankruptcies, including Westward Whiskey, a Diageo-backed distillery based in Oregon. Despite the recent weakness, sales of US spirits have generally grown over the past two-and-a-half decades. Exports have jumped to $2.4 billion in 2024 from $478 million in 2000. In its report, DISCUS attributed this jump in part to the US spirits sector “having a fair and reciprocal playing field with 51 countries that have provided tariff-free access for US spirits,” including the EU, Canada and Mexico.
US spirits exports hit a record high in 2024. Tariffs could destroy that
TruthLens AI Suggested Headline:
"Record High US Spirits Exports Face Threat from New Tariffs"
CNN
7.4
TruthLens AI Summary
In 2024, exports of American-made spirits reached an unprecedented high of $2.4 billion, according to the Distilled Spirits Council of the United States (DISCUS). This growth can largely be attributed to the revitalization of trade relations between the United States and the European Union, with exports to the EU soaring by 39% from the previous year. Despite this remarkable achievement, the spirits industry now faces significant challenges as looming tariffs threaten to undermine its progress. DISCUS President and CEO Chris Swonger highlighted that ongoing trade disputes unrelated to the spirits sector have created uncertainty, leaving many U.S. distillers hesitant to expand their sales. The American whiskey market, in particular, is at risk, as the EU had previously lifted tariffs on U.S. whiskey in 2022, resulting in a nearly 60% increase in exports to the bloc, valued at $699 million. However, the EU is poised to impose new tariffs on American whiskey, which could severely impact this burgeoning market segment.
Additionally, the situation is complicated by Canada’s recent imposition of a 25% retaliatory tariff on all U.S. spirits, which has already led to the removal of numerous American brands from Canadian liquor stores. This move adds another layer of uncertainty for U.S. spirits exporters, with Canada being the second-largest market for American-made spirits, accounting for $221 million in exports last year. The overall demand for U.S. spirits has also declined following a pandemic-induced boom, resulting in a nearly 10% drop in exports to the rest of the world, which has led to layoffs at major distilleries and even bankruptcies, such as that of Westward Whiskey in Oregon. Despite these recent challenges, the long-term trend for U.S. spirits remains positive, with exports having grown significantly from $478 million in 2000 to the current record high. DISCUS emphasizes the importance of maintaining fair trade agreements with countries that provide tariff-free access to U.S. spirits, which is crucial for sustaining this growth trajectory.
TruthLens AI Analysis
The article sheds light on the record-high exports of American spirits in 2024, while simultaneously highlighting the looming threat of tariffs that could hinder future growth. By emphasizing both the achievements and challenges faced by the industry, the piece aims to create awareness about the complexities of international trade affecting the spirits sector.
Implications of Tariffs on the Spirits Industry
The article points out the significant role that tariffs play in the spirits market, particularly focusing on American whiskey. The Distilled Spirits Council of the United States (DISCUS) reports that the EU has been a crucial market, accounting for about half of US spirits exports. The potential reintroduction of tariffs is presented as a major concern, illustrating the precarious balance in international trade relationships. This focus on tariffs suggests an intent to rally support for free trade policies among stakeholders in the industry.
Perception Management
By underscoring the growth in exports juxtaposed with the threat of tariffs, the article aims to create a perception of urgency within the industry. It encourages stakeholders to advocate for better trade relations and positions the issue as critical not just for producers, but also for consumers who may face higher prices or reduced choices. This can foster a sense of solidarity among industry members while also drawing attention to the need for political action.
Potential Omissions and Hidden Agendas
While the article primarily discusses the impact of tariffs, it does not delve deeply into the broader economic context or the potential consequences of ongoing trade disputes on consumers. This omission could indicate a desire to keep the focus narrowly on the spirits industry, potentially to avoid broader criticism of trade policies or economic strategies. The framing of the narrative suggests an effort to maintain a positive outlook while addressing real challenges.
Manipulative Elements
The article carries a moderate level of manipulativeness, primarily through its emotional appeals regarding the implications of tariffs for American distillers. The language used, such as “hangover” and “crosshairs,” evokes strong imagery that could sway public opinion in favor of trade negotiations. By emphasizing the potential fallout from tariffs, the article aims to generate support for policy changes.
Comparison with Other Reports
When compared to other reports on trade and tariffs, this piece aligns with a growing narrative emphasizing the importance of safeguarding specific industries from the fallout of broader trade conflicts. This connection to a larger discourse on trade highlights the article’s relevance and its potential to influence public sentiment regarding trade policies.
Industry Image and Stakeholder Reactions
The publication of this article contributes to an image of the spirits industry as resilient yet vulnerable to external pressures. It may galvanize industry stakeholders to take action or lobby for more favorable trade conditions with the EU and Canada, as these markets are crucial for their profitability.
Broader Economic and Political Scenarios
The implications of this article extend to potential economic fluctuations should tariffs be reinstated. An increase in prices for American spirits could not only affect sales but also impact related sectors such as hospitality and tourism. Politically, this could lead to heightened lobbying efforts in Washington to protect the industry from adverse trade measures.
Community Support and Target Audience
The article is likely to resonate with American distillers, industry advocates, and consumers who support domestic products. It appeals to those who are concerned about the implications of trade policies on local economies and employment within the spirits sector.
Impact on Financial Markets
In terms of market reactions, this article could influence stock prices of companies within the spirits industry, particularly those heavily reliant on exports. Investors may view the threat of tariffs as a risk factor, potentially leading to fluctuations in share prices.
Geopolitical Relevance
The news connects to ongoing discussions about trade relations and the economic strategies of powerful nations, particularly in the context of US-EU relations. Given today’s geopolitical climate, the article underscores the significance of trade policy in shaping international relations.
The use of artificial intelligence in the writing of this article cannot be conclusively determined. However, the structured presentation and clarity of information suggest that AI could have been employed to ensure coherence and readability. If AI was involved, it might have influenced the framing of the narrative to emphasize certain aspects like the urgency of the situation and the potential benefits of trade negotiations.
Overall, the article presents a mix of factual reporting and persuasive elements, leading to a moderate level of reliability. While the data on exports and tariffs is grounded in credible sources, the emotional framing and focus on specific narratives introduce a degree of bias.