Kentucky Bourbon Makers Brace for New Tariffs

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The American bourbon industry is one of the industries to be subjected to retroactive tariffs in response to the Trump Administration's tough trade negotiations.

In June, China, Mexico, Canada, and the European Union collectively agreed to impose tariffs on America's beloved bourbon.

Currently, Kentucky produces 95 percent of the world's supply of bourbon, generating $85 billion a year.

China imports $12.8 million in U.S. spirits a year, $9 million of which is whiskey and the EU imports $789 million of U.S. spirits a year, 85 percent of which is Bourbon, Tennesse whiskey, and rye whiskey.

So the tariffs are bound to take a hit on the industry's revenue, bourbon makers are prepping for the impact it will have on the state.

According to Eric Gregory, the president of the Kentucky Distillers' Association, Kentucky bourbon companies export the spirit to 126 countries and that the larger distillers export more than half their market overseas.

"In the past 15 to 20 years, the global market's really increased, ever since we started with the free trade agreements in the mid-'90s," said Gregory to "NPR."

Now that the free trade agreements like NAFTA and EU agreements are under threat, bourbon makers are preparing to make adjustments, none of which they like.

"This is a 25 percent tax increase - tariffs are taxes, no doubt about it. So you're either going to pass along those costs to your consumer - and hopefully you, you know, have people that you've converted from scotch to remain bourbon drinkers," said Gregory. "Or you take fewer profits back, which means less investment back home here in Kentucky. And we don't like that option either. So there are a lot of different ways out of this. And we don't like any of them."

Kentucky's Congressman Andy Barr met with Vice President Mike Pence when he came to the state in spring to discuss the issue. But bourbon makers are anxiously waiting for a solution from the White House.

Read more about how the bourbon industry is reacting to the tariffs at "NPR."

Speaking of bourbon, last year we used Foodable Labs data to determine the best overall rated bourbon brands. Check out the top bourbon spirits on our list in the video below.