EU threatens ‘counter-measures’ if Trump takes action to protect the US steel industry – and one of the targets could be bourbon whiskey from Kentucky

This article is more than 3 years old

This article is more than 3 years old

The US bourbon industry has warned that its business and consumers around the world will be harmed if the European Union acts on a retaliatory threat to target American whiskey exports.

At the G20 summit in Hamburg on Friday, the European commission president, Jean-Claude Juncker, said that if the US took measures against Germany and China’s steel industries, the EU would “react with counter-measures” within a few days.

'Battle mood' EU threatens bourbon whiskey in US steel trade row Read more

Officials confirmed that one of the targeted products could be bourbon whiskey, 95% of which comes from Kentucky, the home state of US Senate majority leader Mitch McConnell and a state that voted 62.5% for Trump in last year’s election.

“This is a really important industry to Kentucky, so people will not be happy that this in the air,” Susan Reigler, president of the Bourbon Women Association, said.

Bourbon brings $166m in tax revenue to Kentucky annually, and the industry employs nearly 17,500 people in the state, according to the Kentucky Distillers’ Association (KDA). “It’s not just the people who work in the distilleries, or the bottling plants, but also people like the grain farmers and the truckers who transport it,” said Reigler.

The US Congress declared in 1964 that bourbon could only be made in the US, just as tequila must be made in Mexico and champagne in France.

Bourbon, a mix of water, grains and yeast, has historically been popular in Europe, and US distilleries have recently been looking to grow their export market in Asia and Australia.

In 2016, US spirit exports to the EU were valued at $654m, and 20% of that was from bourbon whiskey, according to the Distilled Spirits Council of the United States (Discus).

“Any efforts to impose retaliatory tariffs on US spirits exports to the EU will harm consumers, producers and the US and EU spirits sectors,” Discus said in a statement.

The EU’s warning came after the US threatened to curb steel imports for national security reasons. EU officials are concerned such a move would trigger protectionist reactions around the world, and the EU would probably respond by targeting US agricultural products such as bourbon.

Juncker said the EU was prepared to react within days to a protectionist move by the US. “I am telling you this in the hope that all of this won’t be necessary,” Juncker said. “But we are in an elevated battle mood.”

Eric Gregory, president of the Kentucky Distillers’ Association, said trade penalties would damage progress in the global bourbon trade.

“Global markets are increasingly important to our signature industry, and we have worked hard over the past decade to open doors, level the playing field and eliminate discriminatory tariffs and policies that would put Kentucky bourbon at a competitive disadvantage,” Gregory said.

“We will continue those efforts to promote, protect and elevate its success around the world.”