The American whiskey tariffs of 2025 hit an industry that had only just recovered from the last round.
- Michele Reina
- Jul 1
- 6 min read
The trade war nobody in the drinks industry asked for, and the people paying the price. American whiskey exports collapsed by 19% in 2025. Jim Beam paused production. Hundreds of craft distilleries closed or filed for bankruptcy. This is what happened, why it matters, and why I think we should all be talking about it.
I want to start with something I genuinely believe: the people who make American whiskey are among the most passionate, skilled, and dedicated producers in the drinks world. I have spent years working with them, tasting their products, telling their stories to audiences across the UK and Europe. What has happened to their industry over the past two years is not the result of bad products, poor decisions, or a category past its prime. It is collateral damage, a word that sounds clean and clinical but represents real jobs, real businesses, and real people who spent decades building something extraordinary.
This is my attempt to explain what happened, clearly and honestly.
First, the good news, because there was some
On 19 January 2025, something genuinely historic happened in the world of American whiskey. For the first time in over 52 years, the US government added a new category of whiskey to its federal regulations: American Single Malt Whiskey was officially recognised and legally protected by the Alcohol and Tobacco Tax and Trade Bureau (TTB).
This was the result of years of campaigning by the American Single Malt Whiskey Commission (ASMWC), supported by the Distilled Spirits Council of the United States (DISCUS) and hundreds of individual distillers who sent over 1,000 letters to the TTB demanding a formal standard.
The rules are clear: to call your product American Single Malt Whiskey, it must be made from 100% malted barley, produced and aged entirely in the United States, distilled at a single distillery, and stored in oak barrels no larger than 700 litres.
Before this ruling, the TTB only officially recognised single malt whiskey if it was produced in Scotland. That changed permanently in January 2025, and it changed because of the craft distillery movement, the small operators who believed American whiskey could be more than bourbon and rye, and who built something extraordinary to prove it.
"This is a landmark ruling from the TTB that further cements our standing on the global stage in whiskey. It's a momentous day for American single malt whiskey, and this is just the beginning of a bright future for the category."
Steve Hawley, President, American Single Malt Whiskey Commission — January 2025
That future arrived in January. The trade war was already waiting for it.
What the numbers look like
−19%
| −57%
|
−35%
| −28%
|
These are not small fluctuations. Canada was the largest importer of Kentucky spirits before the trade war. A 57% collapse in a single year is not a dip; it is a market that has been effectively shut. The EU decline is partly explained by importers loading up on stock in late 2024 ahead of anticipated tariffs, but the underlying direction is the same. And the damage compounds: Kentucky exports had already fallen 26% during the first round of Trump-era tariffs in 2018. The industry had only just recovered.
How we got here — a brief timeline
2018
The EU imposes a 25% retaliatory tariff on American whiskey in response to US steel and aluminium tariffs. Exports to the EU fall 20% through 2021, resulting in roughly $112 million in lost revenue. Several craft distilleries never fully recover.
2023
The Biden administration reached an agreement with the EU, and tariffs are suspended. American whiskey exports to the EU grow by more than 60% in the following year. The industry begins to rebuild.
2025
Trump's "liberation day" tariffs hit. The EU threatens a 50% retaliatory tariff on American whiskey. Canada pulls American spirits from provincial shelves. Boycotts spread across both markets. American whiskey exports fall 19% for the year. Craft distillery closures accelerate.
2026
Jim Beam pauses production at its main Clermont distillery. Brown-Forman cuts 650 jobs, 12% of its global workforce. The EU suspends retaliatory tariffs for six months, but the underlying uncertainty remains. Kentucky holds over 16 million ageing barrels, an all-time high, while demand continues to fall.
The big names and the small ones
When people read about Jim Beam pausing production or Brown-Forman cutting 650 jobs, those are serious stories. But the companies behind those brands have reserves, legal teams, and the capacity to wait out market corrections. They will survive this. They are already investing in expansion projects alongside the cutbacks. Heaven Hill is building a $200 million distillery in Kentucky even as it reduces short-term output.
The ones I lose sleep over are the craft distilleries.
The human cost
Artisan distilleries across the country cited "current tariffs that increased production costs significantly" as a direct cause of closure. Boston Harbor Distillery filed for Chapter 11 bankruptcy in March 2025. Black Button Distilling in New York shut operations entirely. Garrard County Distilling Co. in Kentucky and Uncle Nearest in Tennessee were placed into receivership in 2025.
These are not statistics. These are founders who spent years building something. Distillers who perfected their craft. Teams that believed in what they were making. Many of them were the same people who campaigned to get American Single Malt recognised as an official category, who fought for years to put their product on the global map, and are now watching the doors to that map close.
Victor Yarbrough, CEO of Brough Brothers Bourbon, the first African American-owned distillery in Kentucky, founded in 2020, had planned 2025 as his year of expansion: a second distillery, first exports to Canada. "Building a brand takes time," he said. "A massive tariff will shut that down."
It's not just tariffs, it's reputation.
This is the part that troubles me most as someone who champions these products in the UK and across Europe. The damage is no longer just financial. It is reputational.
The Whisky Exchange's commercial buying director Dawn Davies noted that bourbon sales in the UK are steady but no longer growing, a noticeable shift from trends before 2025. One US distiller put it to VinePair with uncomfortable clarity: "The one thing that no one is really talking about is the inherent risk that is now associated with bourbon, that political factor. Now consumers are looking at purchasing a bottle of bourbon as a risk, not because of the quality of it, but because of the political association."
Let that land for a second. A consumer looking at a bottle of Woodford Reserve or Penelope Bourbon is not thinking about the distiller who made it, the grain that went into it, or the years it spent in a barrel. They are thinking about geopolitics.
That is an extraordinary and deeply unfair position for the drinks industry to find itself in.
"Our industry is collateral damage as a result of the trade war. Which is unfortunate, because American consumers love Canadian whiskey, and European consumers love American whiskey, and vice versa."
Chris Swonger, President & CEO, DISCUS
Why I'm still here, and why you should be too
I am a Brand Ambassador for Luxco/MGP and an advocate of American whiskey. That's not a neutral position, and I'm not pretending otherwise. But my belief in these products is not commercial; it is genuine.
I have tasted what the best American distillers are capable of. I have stood in front of audiences across the UK and Europe and watched people discover bourbon, rye, and American single malt for the first time, and seen their faces change.
The quality of American whiskey has never been higher. The category has never been more diverse. What is happening right now is not a story about bad products; it is a story about good people being caught in the middle of something that has nothing to do with what they put in the bottle.
The best thing I can do, and I think the best thing any enthusiast can do, is keep drinking, keep sharing, and keep talking about these products on their own terms.
The craft distillers who are still standing need that more than ever. Not sympathy. Sales.
The next time you're choosing a bottle, consider reaching for an American single malt or an independent bourbon you haven't tried before.
Not as a political statement, as a human one.
I'll be talking about all of this in more detail at the London Craft Beer Festival on 17–18 July, where I'm giving two talks on the American whiskey category. If you're attending, come find me.
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