Tariffs could threaten the future of some U.S. distilleries and bars

CBS News

25-03-2025

At Leiper's Fork Distillery outside Nashville, the notably small batch distiller produces only two and a half barrels of Tennessee whiskey a day, doing everything by hand, from distilling to bottling and labeling.
The whiskey, bourbon and rye produced there are only sold in six states, the U.K. and Canada. But with
tariffs in play
on spirits like Tennessee whiskey, owner Lee Kennedy fears his export sales could soon run dry.
"We haven't adjusted any of our prices over the last, really, uh, since 2020, we have not done any price increases or decreases, and I'm hoping to be able to continue that," Kennedy told CBS News.
The
European Union
, in response to tariffs from the Trump administration, announced in March it plans to put a 50% tariff on all American whiskey, despite whiskey exports jumping nearly 60% in the last three years, according to Distilled Spirits Council of the United States.
Across the northern border, Canadian retailers are pulling American liquor off the shelves.
"A lot of that whiskey that was destined for international markets is now gonna stay in the country," Kennedy said. "So we have this kind of trifecta of not good scenarios for the distilling industry. You know, the threat of tariffs, the decrease in consumption and the oversupply... those three things."
In Dallas, bar owner Gabe Sanchez fears tequila could be nearly impossible to get, as his entire supply comes from Mexico.
In 2024, the U.S. imported more than $5 billion worth of tequila from Mexico, according to Distilled Spirits Council of the United States.
Sanchez expects prices from distributors to skyrocket to make up for the 25% tariff President Trump has threatened to impose on all goods from Mexico. That increase would force Sanchez to either raise his own prices and risk losing customers, or eat the cost himself.
"Places like this are gonna cease to exist. If these trade wars continue, that's like, unfortunately, what's gonna happen. Like, we can only stand in front of the dam and put our finger in it for so long," Sanchez said.