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Expats yearning for a bit of the United States will likely not find it in bourbon or rye.

It seems that American whisky is facing a 50 percent tax when exported to Europe. This could potentially damage the industry of spirits in the US, The Wall Street Journal reported this past Monday. The tariff, anticipated to take effect next year, is the European Union’s reciprocal action to the US taxes on European steel and aluminum. Caught in the crossfire of this dispute are distilleries, even though their products are not directly involved.

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“We’re just collateral damage,” Brooke Glover of West Virginia’s Swilled Dog distillery told the WSJ.

Back in 2018, then-President Donald Trump imposed the steel and aluminum tariffs, causing the EU to respond with its own taxes on iconic American goods, such as Levi’s jeans and Harley-Davidson motorcycles. Initially, American whiskey was taxed at 25 percent, with the tariff suspended a couple of years ago thanks to an agreement between the U.S. and the EU. The tax is supposed to go back into effect in 2024, though, doubled to a whopping 50 percent.

The U.S. is attempting to once again postpone the tariff with a further two-year extension according to sources to The Journal. However, agreement has yet to be reached, thereby placing distilleries in a predicament.

Jeff Quint, the CEO of Iowa’s Cedar Ridge Distillery, express to the newspaper, “With the significant likelihood of the tariffs making a return, it’s truly a deterrent to wanting to invest in these foreign markets. Without assurance that these tariffs have been abolished, no one will substantially invest in promoting bourbon worldwide.”

Since the initial implementation of the tariffs, some distilleries have chosen not to ship their goods to Europe. Confronted with a 25 percent tax, EU exports plummeted 20 percent, down from $552 million to $440 million. However, since its suspension, exports have soared beyond pre-tariff levels according to data from the Distilled Spirits Council of the United States presented to WSJ.

However, if the 50 percent tariff is levied in the new year, this trend is unlikely to continue. As the President of DISCUS, Chris Swonger, informed the media outlet, it “would be a total disaster for the American whiskey business.”

It would also be a disaster for Europeans who love American whiskey.

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