Last call for bourbon? Kentucky’s looming crisis under Trump’s tariffs | Opinion

This article was originally featured on Kentucky.com

Has the Trump administration gone too far, too fast with new tariffs and trade policies? The state of Kentucky provides a perfect example of how critical industries like alcohol and agriculture are being put at risk. In response to President Trump’s new steel and aluminum duties, the European Union is poised to impose a 50% tariff on American whiskey. In response, Trump has threatened imposing a 200% tariff on alcohol produced in Europe.

This puts Kentucky and its companies, who produce 95% of the world’s bourbon, in the crosshairs of an unanticipated trade war with serious consequences. This situation has led to rare bipartisan opposition from U.S. Senators Rand Paul (R-KY), Mitch McConnell (R-KY), and Governor Andy Beshear (D-KY). Canadian provinces are also removing American alcohol from their shelves in retaliation to U.S. tariffs. Alcohol industry leaders are warning that the deeply and globally intertwined spirits market remains vulnerable to retaliatory trade policies. But Kentucky is not alone.

While many agriculture groups have privately lobbied the Trump administration to implement tariff exemptions under current trade policy, little change has resulted. Trump has lowered tariffs on Canadian potash and issued exemptions in the auto industry. The alcohol and agriculture industries, however, which go hand in hand, are pushing for more exemptions. Their private tones are shifting to more frustrated, critical, and public tones. Using the carveouts for potash and the auto industry as evidence, alcohol producers and the Distilled Spirits Council of the United States are calling for exemptions as imports such as tequila, mezcal, and champagne are at risk of tariffs.

Even Tesla, in a letter, asked the Office of the U.S. Trade Representative to “consider the downstream impacts” of trade policies. They said they would be “exposed” to retaliatory policies and that past tariffs have made the cost of domestically producing Teslas higher. In arguing against widespread and broad tariffs, Tesla holds that they make U.S. manufactures less competitive internationally. A wide variety of industry groups, including the U.S. Chamber of Commerce, are exhibiting this same anxiety over Trump’s trade policies.

Countries are either taking a confrontational approach, like Canada, or a cautious one, like Mexico and the United Kingdom, to the Trump administration’s trade policies. Some are directly pushing back while others are starting private trade talks. As allies continue to get impatient, retaliation and negative economic outcomes are looming.

The Trump administration’s use and implementation of exemptions and carveouts is a crystal clear signal that the Administration may be carrying out tariffs way too fast. Groundwork should have been laid to listen to American business owners, industry leaders, and trade groups, allowing them to inform the strategy on these tariffs and their implementation. We have always contended that for tariffs to have any chance at working, responsible and common-sense policies must be coupled with them. This includes responsible deregulation, investment in domestic manufacturing and production, fully realizing the unleashing of American energy production, and pro-business and pro-worker tax incentives for American manufacturers.

Congressman Morgan McGarvey (D-KY), for instance, supports the responsible use of tariffs, but is calling out President Trump’s implementation methods. He contends that Trump’s tariffs are too broad, create collateral damage, and harm U.S. manufacturers. This is because the new trade policies are too far-reaching and have gone too far too fast. Common-sense, complementary policies that provide incentives for domestic manufacturers must be coupled with tariffs. Our industry leaders should always be consulted before far-reaching and volatile economic changes are made. We urge caution, care, responsibility, and listening when it comes to the implementation of tariffs and new trade policies. The revitalization of our economy and our manufacturing sector depends on it.