Steel, aluminum and No. 45 might make whiskey hella expensive in Europe soon
Yep. Trump's past political decisions might make a 750ml bottle of Jack Daniels nearly $50 across the pond. But how does that impact us here in the States?
The European Union is fed up with America, and they’re about to take it out on our nation’s whiskey distillers.
The reason being? Beef over steel and aluminum.
“During the Donald Trump era, the president took a very aggressive posture on a whole host of trade issues all around the world, including with the European Union,” said Chris Swonger, the president and CEO of the Distilled Spirits Council of the United States, to CNN on Monday. “One big issue related to trade was challenges over steel and aluminum.
“So the president had his stance on steel and aluminum and in response, in June 2018, the Europeans imposed a 25% tariff on American whiskey along with other products... They went back and forth until 2021 when the tariffs on American whiskey were suspended and we took a great sigh of relief.”
“But that could soon change,” Swonger continued. “The EU, the largest export market for American whiskey, is set to impose a 50% tariff on imports of the golden liquor next year. Spirit industry advocates say that would be a devastating blow to a growing part of the US economy.”
To provide context here: Jack Daniels, on average, costs about £25 in London — the equivalent of $31 in the US. If a 50% tariff went into place, this could have an impact in a few ways:
Folks in Europe might have to pay $40-$50 for a bottle of Jack Daniels.
American distillers banking on importing their juice abroad might see their distribution decline, or shut off completely, due to the tariff.
If sales and distribution decline in Europe, American distillers could try to make up for lost revenue by increasing prices domestically.
What’s all the more fascinating is that American whiskey is living its best life these days. Distilleries are popping up nationwide, as there are over 2,600 currently running in the States. When the 25% tariff was removed, American whiskey exports to the EU recovered +118% in the first half of 2023 compared to the same period in 2022. That’s called Supply and Demand 101.
However, December 31 looms as a deadline. Per Swonger, negotiations have continued under the Biden administration as the US and the EU work to resolve the steel and aluminum case. If it is not resolved before then, the EU will automatically impose a 50% tariff on American whiskey on January 1. Yikes.
This has never been a political newsletter, but understanding the tradewinds of political matters can help you understand how to save a few bucks and know when to be opportunistic. So I’ll offer you a few thoughts and suggestions:
Consider asking for some quality American whiskey for Christmas: The holidays mean retailers want things to move off the shelves. If these negotiations don’t work out by the end of 2023, a familiar phrase from Fat Joe will become immediately relevant. “Yesterday’s price, is not today’s price.”
Buy some stock of major spirit brands: This isn’t financial advice, moreso a callout. If tariffs are imposed, stock prices for certain brands will likely dip. When I was in an investment club back in college, I was encouraged to “buy the dips.” Just don’t put too much dip on your chip.
Try out other international spirits: Some of the best juice I’ve sipped have come from France, South Africa and India. You might look at some of these prices and be like WTF? Take that as a sign to maybe expand your horizons a bit. Three Ships from South Africa is a favorite of mine.
Try out hyper-local spirits: Some distillers aren’t ready to distribute to Europe. Which means their prices will likely not be as affected. Give them a shot. Here in Texas, I’m a big fan of Treaty Oak, based in Austin. They don’t miss.