US spirits exports hit a record high in 2024. Tariffs could destroy that
Exports of American-made spirits hit a record high last year. However, a hangover is about to hit the industry as tariffs threaten to stunt growth, a leading industry group warned.
Exports hit a record $2.4 billion in 2024, according to the Distilled Spirits Council of the United States (DISCUS). In a report released Thursday, the trade group said that last year's growth is thanks to a rebuilt trading relationship between the US and the European Union. Exports to the EU jumped 39% in 2024 compared to a year prior — a gain put in peril by President Donald Trump's trade war.
'Unfortunately, ongoing trade disputes unrelated to our sector have caused uncertainty, keeping many US distillers on the sidelines and curtailing sales growth,' said DISCUS President and CEO Chris Swonger in a release.
American-made whiskey in particular stands in the crosshairs of the trade dispute. The EU had removed tariffs on US whiskey in 2022. Since then, exports from the US to the EU have jumped nearly 60% to $699 million, according to data compiled by DISCUS.
The EU was set to levy new tariffs on American whiskey this month, but delayed them after Trump announced a 90-day pause on the so-called retaliatory tariffs against most other nations. Swonger called the pause a 'positive first step toward getting the US-EU spirits sectors back to zero-for-zero tariffs and untangling spirits from these trade disputes.'
EU tariffs would be a major blow for American distillers and spirits makers. The bloc is the largest export market for US-made spirits, accounting for about half of all US spirits exports, worth $1.2 billion last year, DISCUS said.
But it's not just the EU. Canada is the second-largest recipient of US-made spirits, totaling $221 million last year. Canada's 25% retaliatory tariff on all US spirits that began last month, and the subsequent removal of many American brands from Canadian liquor stores, is causing uncertainty in this year's outlook with the country, DISCUS said.
Tariffs aren't the only problem major spirits makers are dealing with. A decrease in demand following a pandemic-induced boom caused US exports of spirits to the rest of the world to drop by nearly 10%, DISCUS said.
That has resulted in layoffs at major distillers, such as at Woodford Reserve and Jack Daniel's parent company Brown-Forman, and bankruptcies, including Westward Whiskey, a Diageo-backed distillery based in Oregon.
Despite the recent weakness, sales of US spirits have generally grown over the past two-and-a-half decades. Exports have jumped to $2.4 billion in 2024 from $478 million in 2000.
In its report, DISCUS attributed this jump in part to the US spirits sector 'having a fair and reciprocal playing field with 51 countries that have provided tariff-free access for US spirits,' including the EU, Canada and Mexico.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNN
34 minutes ago
- CNN
US and China kick off fresh round of trade talks in London over intractable issues
A new round of trade negotiations between the United States and China is set to begin Monday in London as both sides try to preserve a fragile truce brokered last month. The fresh talks were announced last week after a long-anticipated phone call between US President Donald Trump and Chinese leader Xi Jinping, which appeared to ease tensions that erupted over the past month following a surprise agreement in Geneva. In May, the two sides agreed to drastically roll back tariffs on each other's goods for an initial 90-day period. The mood was upbeat. However, sentiment soured quickly over two major sticking points: China's control over so-called rare earths minerals and its access to semiconductor technology originating from the US. Beijing's exports of rare earths and their related magnets are expected to take center stage at the London meeting. But experts say Beijing is unlikely to give up its strategic grip over the essential minerals, which are needed in a wide range of electronics, vehicles and defense systems. 'China's control over rare earth supply has become a calibrated yet assertive tool for strategic influence,' Robin Xing, Morgan Stanley's chief China economist and other analysts wrote in a Monday research note. 'Its near-monopoly of the supply chain means rare earths will remain a significant bargaining chip in trade negotiations.' Since the talks in Geneva, Trump has accused Beijing of effectively blocking the export of rare earths, announcing additional chip curbs and threatening to revoke the US visas of Chinese students. The moves have provoked backlash from China, which views Washington's decisions as reneging on its trade promises. All eyes will be on whether both sides can come to a consensus in London on issues of fundamental importance. US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer will meet a Chinese delegation led by Vice Premier He Lifeng. On Saturday, Beijing appeared to send conciliatory signals. A spokesperson for China's Commerce Ministry, which oversees the export controls, said it had 'approved a certain number of compliant applications.' 'China is willing to further enhance communication and dialogue with relevant countries regarding export controls to facilitate compliant trade,' the spokesperson said. Kevin Hassett, head of the National Economic Council at the White House, told CBS's Face the Nation on Sunday that the US side would be looking to restore the flow of rare earth minerals. 'Those exports of critical minerals have been getting released at a rate that is higher than it was, but not as high as we believe we agreed to in Geneva,' he said, adding that he is 'very comfortable' with a trade deal being made after the talks. In April, as tit-for-tat trade tension between the two countries escalated, China imposed a new licensing regime on seven rare earth minerals and several magnets, requiring exporters to seek approvals for each shipment and submit documentation to verify the intended end use of these materials. Following the trade truce negotiated in Geneva, the Trump administration expected China to lift restrictions on those minerals. But Beijing's apparent slow-walking of approvals triggered deep frustration within the White House, CNN reported last month. Rare earths are a group of 17 elements that are more abundant than gold and can be found in many countries, including the United States. But they're difficult, costly and environmentally polluting to extract and process. China controls 90% of global rare earth processing. Experts say it's possible that Beijing may seek to use its leverage over rare earths to get Washington to ease its own export controls aimed at blocking China's access to advanced US semiconductors and related technologies. The American Chamber of Commerce in China said on Friday that some Chinese suppliers of American companies have received six-month export licenses. Reuters also reported that suppliers of major American carmakers – including General Motors, Ford and Jeep-maker Stellantis – were granted temporary export licenses for a period of up to six months. While China may step up the pace of license approvals to cool the diplomatic temperature, global access to Chinese rare earth minerals will likely remain more restricted than it was before April, according to a Friday research note by Leah Fahy, a China economist and other experts at Capital Economics, a London-based consultancy. 'Beijing had become more assertive in its use of export controls as tools to protect and cement its global position in strategic sectors, even before Trump hiked China tariffs this year,' the note said. As China tackles a tariff war with the US head on, it's clear that it is continuing to cause economic pain at home. Trade data released Monday painted a gloomy picture for the country's export-reliant economy. Its overall overseas shipments rose by just 4.8% in May compared to the same month a year earlier, according to data released by China's General Administration of Customs. It was a sharp slowdown from the 8.1% recorded in April, and lower than the estimate of 5.0% export growth from a Reuters poll of economists. Its exports to the US suffered a steep decline of 34.5%. The sharp monthly fall widened from a 21% drop in April and came despite the trade truce announced on May 12 that brought American tariffs on Chinese goods down from 145% to 30%. Still, Lv Daliang, a spokesperson for the customs department, talked up China's economic strength, telling the state-run media Xinhua that China's goods trade has demonstrated 'resilience in the face of external challenges.' Meanwhile, deflationary pressures continue to stalk the world's second-largest economy persist, according to data released separately on Monday by the National Bureau of Statistics (NBS). In May, China's Consumer Price Index (CPI), a benchmark for measuring inflation, dropped 0.1% compared to the same month last year. Factory-gate deflation, measured by the Producer Price Index (PPI), worsened with a 3.3% decrease in May from a year earlier. Last month's drop marks the sharpest year-on-year contraction in 22 months, according to NBS data. Dong Lijuan, chief statistician at the NBS, attributed the decline in producer prices, which measures the average change in prices received by producers of goods and services, to a drop in global oil and gas prices, as well as the decrease in prices for coal and other raw materials due to low cyclical demand. The high base of last year was cited as another reason for the decline, Dong said in a statement. CNN's Hassan Tayir, Simone McCarthy, Fred He contributed reporting.
Yahoo
35 minutes ago
- Yahoo
Trump Fans the Flames With Call to ‘Liberate Los Angeles'
President Donald Trump showed little interest in de-escalating the situation in Los Angeles on Sunday evening as he fired off a charged post calling on administration officials to 'liberate' the city from what he called a 'Migrant Invasion.' In an extraordinary step on Saturday, the president ordered 2,000 National Guard troops to the area, against the wishes of local leaders, to quash protests that broke out over federal immigration raids at workplaces. California Governor Gavin Newsom formally asked the Trump administration to rescind the order on Sunday evening, accusing it of deploying troops unlawfully and unnecessarily. Newsom said Trump is 'hoping for chaos so he can justify more crackdowns, more fear, more control.' But Trump poured fuel on the fire with a Sunday evening post on Truth Social, claiming Los Angeles 'has been invaded and occupied by Illegal Aliens and Criminals.' 'Now violent, insurrectionist mobs are swarming and attacking our Federal Agents to try and stop our deportation operations — But these lawless riots only strengthen our resolve‚' Trump wrote, even though he'd said hours earlier he didn't think the clashes amounted to an insurrection. He said he was directing Homeland Security Secretary Kristi Noem, Defense Secretary Pete Hegseth, and Attorney General Pam Bondi to 'take all such action necessary to liberate Los Angeles from the Migrant Invasion, and put an end to these Migrant riots.' 'Order will be restored, the Illegals will be expelled, and Los Angeles will be set free,' he wrote. Trump also rolled out quite a specific new catchphrase on Sunday, claiming protesters were spitting at law enforcement. 'They spit, we hit,' Trump said. It was somewhat reminiscent of a rhyme he coined during the 2020 Black Lives Matter protests: 'When the looting starts, the shooting starts.' People began taking to the streets of L.A. late last week to protest Immigration and Customs Enforcement raids and arrests at multiple workplaces—part of Trump's promise of a deportation crackdown. The Los Angeles Police Department said Saturday the protests had been peaceful, but it was prepared to respond to 'any potential acts of civil unrest.' Some demonstrations resulted in tense clashes, with authorities deploying flash bangs and tear gas to disperse crowds. As tensions escalated on Sunday, police reported that some protesters had thrown objects and set cars on fire. Local authorities said the federal response only inflamed tensions. 'Trump is trying to manufacture a crisis in LA County—deploying troops not for order, but to create chaos," Newsom posted on X Sunday, imploring his constituents: 'Don't take the bait. Never use violence or harm law enforcement.' Later on Sunday evening, he said he had met with the Los Angeles police and sheriffs departments and other state emergency officials 'as we respond to protests provoked by chaos from Washington.' Los Angeles Mayor Karen Bass said Sunday evening the federal response evoked a 'feeling here of intentional chaos in a situation that had not broken out to violence short of a few people—and there's nothing unusual about that—and our police departments can manage that." Earlier, she had written on X: 'We will always protect the constitutional right for Angelenos to peacefully protest. However, violence, destruction and vandalism will not be tolerated in our City and those responsible will be held fully accountable.' Late Sunday night, Trump lashed out at Newsom and Bass yet again with another Truth Social post. 'Governor Gavin Newscum and 'Mayor' Bass should apologize to the people of Los Angeles for the absolutely horrible job that they have done, and this now includes the ongoing L.A. riots,' he wrote. 'These are not protesters, they are troublemakers and insurrectionists. Remember, NO MASKS!' The president followed that post up with another simply declaring 'Paid Insurrectionists!'
San Francisco Chronicle
39 minutes ago
- San Francisco Chronicle
China says its exports to the US fell nearly 10% in May, as trade talks are due to start in London
China's exports to the United States sank fell nearly 10% in May from a year earlier, new customs data show, adding to pressure on the world's second largest economy as a new round of trade talks with Washington was due to start later Monday in London. China's total exports rose 4.8% last month, slowing from an 8.1% year-on-year increase in April. Imports declined 3.4% year-on-year, leaving a trade surplus of $103.2 billion. China exported $28.8 billion to the United States in May, while its imports from the U.S. fell 7.4% to $10.8 billion, the report said. Still, exports to Southeast Asia and the European Union remained robust, growing 14.8% and 12%, year-on-year. Exports to Thailand, Vietnam and Indonesia were sharply higher, and exports to Germany jumped more than 12%. 'The acceleration of exports to other economies has helped China's exports to remain relatively buoyant in the face of the trade war,' Lynne Song of ING Economics said in a commentary. Many businesses had rushed orders earlier in the year to try to beat higher tariffs. Once new import duties took effect, shipments slowed. Exports will likely rebound somewhat in June thanks to a 90-day suspension of most of the tariffs China and the U.S. imposed on each other in their escalating trade war, Zichun Huang of Capital Economics said in a report. 'But with tariffs likely to remain elevated and Chinese manufacturers facing broader constraints on their ability to sustain rapid gains in global market share, we think export growth will slow further by year-end,' Huang said. Despite the tariffs truce, rancor between Beijing and Washington has persisted, with angry exchanges over advanced semiconductors, 'rare earths' that are vital to many industries and visas for Chinese students at American universities. The round of negotiations due to take place later Monday in London follow a phone call last week between Trump and Chinese leader Xi Jinping. It's unclear if that exchange will lead to any significant progress during the talks this week. Speaking to reporters on Air Force One on Friday, Trump said Xi had agreed to restart exports of rare earth minerals and magnets to the U.S. which China had slowed, threatening a range of U.S. manufacturers that relied on the critical materials. There was no immediate confirmation from China. The trade data released on Monday showed a nearly 21% plunge in the value of China's rare earths exports in January to May compared with a year earlier. In terms of volume, those exports rose 2.3%. Similar trends can be seen in exports of other products and commodities, such as shoes, ceramics and cell phones, as slowing demand causes prices to fall. Other data released Monday highlighted the pressure on China's own economy from slowing exports. Imports have faltered since manufacturers import many of the components and materials needed for the goods they assemble for the world. At the same time, China's own domestic markets are suffering. The government reported that consumer prices fell 0.1% in May, evidence of sluggish demand. The persisting deflation partly reflects lower food prices, economists said.
