LOUISVILLE, Ky. (WDRB) -- U.S. representatives from Kentucky have sent a bipartisan letter to U.S. Trade Representative Katherine Tai asking to help suspend tariffs on American whiskey.
Congressmen John Yarmuth and Andy Barr, co-chairs of the Congressional Bourbon Caucus, led the effort for the letter — signed by 48 other colleagues in the House — that asks for Tai to work with the European Union (EU) and United Kingdom to immediately stop tariffs on the export from the U.S.
“Bourbon still has some growth opportunity in the United States, but most of their future growth will be overseas, particularly in Europe,” Yarmuth told WDRB News.
Before the tariff, Kentucky bourbon had been flowing freely in Europe. It was a growing source of revenue for the industry.
“From 2010 to 2017, Kentucky bourbon exports grew by 98%,” said Eric Gregory, president of the Kentucky Distillers Association. “That's one of the reasons we have all this investment going in the distilleries — the expansion, all the new jobs created.”
In 2018, the European Union imposed a 25% tariff on American whiskey as part of a trade war touched off by President Donald Trump. Since then, Gregory said, exports have plunged by 35% globally and by 50% to the EU.
“We're talking about hundreds of millions of dollars lost to American whiskey,” he said.
Yarmuth and Gregory said time is of the essence since the tariffs are set to double on June 1.
“If that happens, you're talking about a crippling blow to our industry with long-term consequences,” Gregory said.
Yarmuth said he has spoken with President Joe Biden about the issue, but negotiations will be tough.
“I know they're working on it and think when you have this kind of bipartisan support — 50 members of Congress, very, very legitimately bipartisan — it should be enough incentive for them to move to help the bourbon industry,” Yarmuth said.
Republican Senate Minority Leader Mitch McConnell does not agree with Yarmuth on much, but he said he is on board with the move to reverse the tariff which he called “counterproductive to one of Kentucky’s great products.”
“Pushing back against bourbon tariffs is something we can work on together,” McConnell said.
McConnell was not able to convince Trump to end the trade war, but the bourbon industry hopes Biden will be more receptive.
“Trade wars have no winners. They only have consequences,” Gregory said. “And right now, we're collateral damage in a war that we didn't start.”
The caucus believes permanently lifting the tariff will support the recovery of restaurants, bars and small craft distilleries around the U.S.
Last year, more than 2,000 craft distillers in 37 states exported American whiskey. According to the letter sent to Tai, the distilleries' sales have decreased by 41%, while 31% of their employees have been furloughed since the start of the COVID-19 pandemic.
"As the Biden Administration continues to work with the EU and the UK on priority trade issues, we strongly urge that the Administration work with the EU and UK to secure the immediate suspension of tariffs on American whiskey," the letter concludes.
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