Amid the economic maelstrom of Donald Trump’s trade war, drink makers might take a small drop of comfort: the EU has dropped plans to hit American bourbon with retaliatory tariffs.
Bourbon and other US whiskeys have escaped EU countermeasures after heavy lobbying from the EU’s drinks-producing countries – such as whiskey-making Ireland and the wine behemoths Italy and France – who feared their alcohol industries would become casualties of a global trade war.
Bourbon and wine have been removed from a draft list of US goods that will be subject to EU retaliatory tariffs in response to Trump’s duties on steel and aluminium announced last month, according to a leaked list first reported by Reuters.
EU member states will vote on the final list on Wednesday, which targets €21bn goods, down from €26bn originally foreseen, after talks with the EU’s 27 member states and many industry bodies. The list of potential targets facing mostly 25% retaliatory tariffs now ranges from almonds to yachts, via diamonds and dental floss, soya beans and steel parts. But bourbon and wine have been dropped.
France, Italy and Ireland protested against their inclusion after Trump threatened a counter-punch on learning of the threat to bourbon last month. On social media on 13 March, he warned of “a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES”.
Ireland’s foreign minister, Simon Harris, said on Monday he had “questioned the strategic relevance” of targeting bourbon, while the French prime minister, François Bayrou, described the proposal as “a misstep”.
The French government, which has been calling for a tough response to US tariffs, feared damage to its drinks industry, as one champagne maker warned it would be “game over” for the US market if 200% tariffs came to pass.
French cognac and brandy makers have since last October been grappling with Chinese tariffs, levied by Beijing in retaliation over the EU’s decision to impose anti-dumping duties on Chinese electric vehicles.
Bourbon became a possible target as it was already in the EU’s playbook. When Trump imposed steel and aluminium tariffs in his first term, the EU responded by targeting emblematic US goods such as Harley-Davidson motorbikes, blue jeans and bourbon. “We can also do stupid,” was how the then European Commission president, Jean-Claude Juncker, described the counter-measures, as he said the bloc had no choice.
The targeting of alcoholic drinks in trade wars has alarmed and baffled the industry. In the two decades following the removal of nearly all tariffs on spirits between the US and EU in 1997, transatlantic trade grew by 450%, reaching €6.7bn in 2018 before the start of tariffs, according to the pan-European trade body, spiritsEurope.
In the US, Irish whiskey, Cognac and Polish vodka have protected status, while similarly, in the EU only US products can be bourbon or Tennessee whiskey.
Ireland had also feared that Trump’s retribution would snare its sizeable whiskey industry, with Irish whiskey exports to the US in 2024 valued at between €420m and €450m by the national food and drink board Bia.
The sector is dominated by brands such as Jameson. An explosion in the number of craft distilleries has led to around 40 whiskey and gin makers being established, often in rural areas, and another 10 north of the border, with 5.7m cases sent to the US in 2023 from the republic alone. These range in price from $30 a bottle to almost $5,000 for a bottle of Midleton Very Rare Foret de Troncais vintage whiskey.
A tit-for-tat war could have hit production costs, too, as bourbon oak casks are used to colour and age whiskey in Ireland and elsewhere in the EU before sale back to the US.
Under US rules, bourbon is aged in virgin oak, which is discarded after one or two years, but the barrels are sold on to the UK at £300 a unit, generating a whole new side business for the US drink trade.
“It is not good for Europe, not good for Ireland. It’s not good for anybody,” said Paul Nash, the founder of Wild Atlantic Whiskey in county Tyrone, who is concerned about the 10% and 20% tariffs still facing UK and EU exports.
The US applied a universal tariff of 10% on UK goods from 5 April, while the 20% rate on EU goods comes into force on 9 April.
Northern Ireland whiskey is also hampered by the EU trade tariffs, partly because of Brexit rules tying it to the EU trade rules but mostly because whiskey makers source their barley in the republic.
A European Commission spokesperson declined to comment on bourbon, as the list had not been made public. “We are taking every step to ensure that the measures we come forward with achieve their intended purpose, which is to allow for the minimum amount of damage here in the EU while providing us with the maximum amount of leverage in our negotiations,” the spokesperson said. “We don’t want tariffs. We want to avoid them.”
