The Distilled Spirits Council of the United States (DISCUS) has joined the chorus of drinks industry voices calling on US President-Elect Donald Trump to reconsider tariffs on imported good.

Trump vowed on the election trail that he would instate a tariff of 10-20% on every country, with additional tariffs of 60-100% on goods imported from China.

In a post to his social media platform Truth Social this week he confirmed he would impose a 25% tariff on products from Mexico and Canada, and an additional 10% tariff on products from China.

However, the drinks industry fears the move will ignite a trade war and also have a damaging effect on the American hospitality sector.

DISCUS President and CEO Chris Swonger said: “We appreciate President-elect Trump’s goal to protect the American people and US jobs. Our industry has been weighed down by retaliatory tariffs as part of unrelated trade disputes since 2018, which crashed our exports harming thousands of distillers and their farmers across the United States. 

“We are now currently facing the threat of a devastating 50% tariff on American whiskey by the EU at the end of March 2025. Imposing a tariff on Tequila and Canadian Whisky from two of our largest trading partners could kick off more retaliatory tariffs on American spirits to Canada and Mexico.

“Under the United States-Mexico-Canada Agreement (USMCA), tequila and Canadian whisky are designated as distinctive products, similar to bourbon, where they can only be made in their country of origin.  Slapping a tariff on tequila and Canadian whisky will not boost American jobs simply because they cannot be produced in the United States.

“The US spirits sector continues to experience a slowdown. At the end of the day, tariffs on spirits products from our neighbours to the north and south are going to hurt US consumers and lead to job losses across the US hospitality industry just as these businesses continue their long recovery from the pandemic.:

Whisky makers unite to fight tariffs

During Trump’s previous term in office, a 25% tariff on single malt scotch whisky was levied between October 2019 and March 2021.

Over this 18-month period, the Scotch whisky industry lost over £600 million in exports to the United States – equivalent to over £1 million a day.

The tariff was suspended for five years in June 2021 and Scotch whisky industry fears that it will once again be collateral damage in a new trade war.

In May 2024, the Scotch Whisky Association (SWA) visited Washington alongside DISCUS to meet with members of Congress and partners in the United States to avoid the reinstatement of the 25% tariff. 

Swonger said at the time: “Nearly two years ago, distillers in the United States and Scotland jointly toasted the US and the UK governments for reaching important agreements that secured the removal of retaliatory tariffs on Single Malt Scotch Whisky and American Whiskeys in separate trade disputes wholly unrelated to the distilling sector. 

“These agreements have been instrumental in resetting the crucial trading relationships between the U.S. and UK, benefitting consumers and producers on both sides of the Atlantic.  If an agreement is not reached by June 2026, the 25% US tariff on Single Malt Scotch will return, dampening the recovery of the hard-hit hospitality sector as it emerges from the COVID-19 pandemic.   :

Fears for wine industry

Wine & Spirits Wholesalers of America is equally concerned by the effect tariffs will have on the wine industry. 

Chairwoman Dina Opici said: “These tariffs pose a significant threat to an industry already grappling with declining volumes and rising costs.

“The wine and spirits industry is built upon products with unique origins, crafted by producers whose authenticity resonates with consumers. These proposed tariffs would undermine this authenticity by disrupting the critical role imports play in our market and limiting consumer access to the distinctive products consumers know and love.”

“Beyond our industry, the ripple effects of such tariffs would extend to consumers, retailers and the recovering hospitality sector – increasing costs at a time when affordability is essential.

“These broad economic consequences jeopardise the stability and growth of our industry and threaten the livelihoods of those it supports. Now more than ever, it is vital to advocate for policies that sustain the wine and spirits industry, protect American jobs and maintain a healthy market.”

America’s restaurateurs and wine merchants aren’t happy about the prospect of wine tariffs either. They experienced the detrimental effects of them in 2019, when the first Trump administration put tariffs on European wines.

Wine Industry Advisor writes: “Tariffs disrupt the entire US wine industry within the three-tier system, from the immediate U.S. businesses that rely on the sales of imported wines to domestic growers that need healthy distributors for access to market. The American wine market is an ecosystem, where weakness in one tier reverberates throughout.

“For every dollar spent on wines imported from the EU, more than four dollars in revenue is generated for US businesses. The sales of imported wines are particularly crucial for restaurants, as they represent one of the few high-profit items in an otherwise challenging industry. In a sector often characterized by slim margins and intense competition, imported wines offer restaurants an opportunity to enhance profitability.

“It is a common misconception that tariffs on imported wines might encourage consumers to buy more American wine, but wine is not ‘fungible’, meaning wines from different regions are not interchangeable. A consumer seeking a Chianti from Italy will not likely switch to a California Cabernet, as the appeal lies in the unique attributes of wines from specific regions.”

Will a trade surplus save Australian winemakers?

There are hopes that because the US has a trade surplus with Australia, our industry could be spared crippling tariffs.

Australia’s wine export market only recently returned to growth, driven by the re-entry of Australian wine exports to mainland China following the removal of tariffs on Australian bottled wine in late March 2024.

Ranked the most attractive wine market in the world for at least eight years in a row by Wine Intelligence, the US was Australia’s second largest export market by volume and value for the year ended June 2024 according to Wine Australia’s export data.

Trade Minister Don Farrell said: “We hope there won’t be a worse trade war after the American election. We want a prosperous region and the best way the Americans can ensure prosperity in our region is by continuing with the free trade rules. We will advocate for more free trade, not less.”