Countries have retaliated to Trump tariffs with their own taxes on US goods, and small companies in particular are feeling the pinch

The Trump administration has levied tariffs on China, the European Union, Canada and Mexico. Not surprisingly, those countries have retaliated with their own taxes on US-made goods. Many small businesses – from farmers to auto parts makers – have been caught in the middle of this growing trade war. We’ve been hearing about cars, steel and agriculture. But business owners in another industry are also feeling the pain: whiskey makers.

Big companies like Jack Daniel’s are already warning that – thanks to new tariffs from Europe, Canada and elsewhere – prices for many of their overseas customers could rise by as much as 10% over the next few months, a move that will surely affect sales, profits and potentially jobs at the company, based in Lynchburg, Tennessee.

Small companies in particular are feeling the pinch too. According to this report by Portland TV station KXLY, Dry Fly Distillery, an 11-year-old whiskey company based in Spokane, Washington has had orders to Canada cancelled due to a 25% tariff imposed on American-made whiskey (and many other goods) that begins on 1 July.

“It makes me uncompetitive in the market,” Don Poffenroth, the company’s owner said in the report. “You take 10% away from a small business, it’s significant.”

Dry Fly’s woes trickle down. Because he’s losing orders to customers in the EU, Canada and China, Poffenroth says he will be forced to buy less local grain and cut back on employee hours. He’s not the only small distillery that’s challenged.

The owner of Kentucky-based James E Pepper Distillery invested hundreds of thousands of dollars in the past year expanding their European presence and is now worried that European customers will spend their money on other, more affordable whiskeys from Scotland or Ireland and his distributors will ultimately drop his product line. The tariffs were “like a punch in the gut”, he told ABC News.

“The imposition of tariffs on these products by our major trading partners threatens to seriously impede the export progress that has benefitted our sector and created jobs across the country.” Clarkson Hine, the CEO of Distilled Spirits Council interim, wrote in a letter to the commerce secretary, Wilbur Ross in mid-June. Hine said that such tariffs “would severely harm producers, US farmers … distribution and logistics providers, as well as other input providers such as glass and other packaging suppliers”, and that the spirits sector directly and indirectly employs approximately 1.5 million people.

Unfortunately, no minds were changed and the war is on.

So what to do if you’re caught in the middle of an international trade dispute like Dry Fly or James E Pepper – or if you’re in the auto, steel, farming or other industries likewise affected? It’s not easy, particularly if you’re a small business with limited capital. Many business owners I know are trying to pivot to other markets if possible and cut overhead. Some are expanding their marketing in regions that aren’t impacted by tariffs and are considering partnerships with companies who can license their brand or manufacture their product locally.

But perhaps the best words of wisdom are from Lawson Whiting, the chief operating officer of Brown-Forman, the owner of Jack Daniel’s. Although concerned with the situation, Whiting has in the past dealt with other similar issues such as exchange rate fluctuations and unexpected excise tax increases. “All these dynamics that can move pricing around in a pretty quick moment,” he told The Tennessean. “We’ve experienced (this type of thing) before and we think we’ll fight through it again.”

Easy to say if you’re a big company, I know.