Bulwark Takes - Trump’s Trade Wars Are Crushing America’s Bourbon Industry

Episode Date: December 22, 2025

Sam Stein, Catherine Rampell and Sonny Bunch take on Trump’s trade wars, the bourbon bust in Kentucky, and how tariffs, retaliation, and broken alliances are hammering an iconic American industry.

Hey, everyone. It's me, Sam Stein. Managing Editor at the Bullwark. And I'm joined by Sunny Bunch and Catherine Rampel for a segment on bourbon. And what is happening to the industry because of Trump's trade wars. We had agreed when we decided to do the segment that we were all going to drink, bourbon. And then it turns out that I'm literally the only one who has bourbon. Got you. I'm going to pour it. Okay, Sam, you need to disclose what time of day we are recording this. It's 9.30 p.m. It's 12.30 p.m. Whatever. This was supposed to be the gimmick here, and you guys abandoned me, and so now I'm the only one does. All right. The real reason we're doing this is because Jim Beam is shuddering one of its distilleries in Kentucky.

There are a couple of different ways to look at this, but I think the fairest way is that the industry is changing, consumption habits are changing, but also Trump's trade wars. are having damaging effects. So because Sonny is more of a bourbon enthusiast than an economics report, or no offense, Sunny, I'm going to go with Catherine to take the first stab at what the hell is going on here. So to be clear, the bourbon industry does have these boom bust cycles pretty regularly

in part because they have to guess a few years in advance what demand is going to be, right? I think you have to, for it to be legally called bourbon, I think it needs to have been barrel-aged for at least two years, but often it's longer than that. So they can get stuff wrong. It's hard. However, the chances of getting things wrong this year were really high because of Trump's tariffs, because Trump has ticked off basically all of our trading partners, and as a result, they are hitting us where it hurts.

Either they are counter-tariffing us. as Canada did, or people are just so mad at the United States that they stopped buying U.S. made booze and U.S. made other things, too. And so if you look at the data, if you look at data from like the Distilled Spirits Council, you can see that there are huge declines in purchases of U.S. spirits in general, not just bourbon in Canada, for example. I think I had the numbers in front of me. I think it was like 80% decline.

And that's in Canada. But in other big markets, Japan, the EU, et cetera, spirits purchases are also way down. And they did not this time around Capt. Terrafas. They did last time. But it's just like people want to boycott us. I have a question, though, because you like rightfully note that this is a calculation by beam, at least just them for now, but maybe others.

about where the market's going to be in three or four years, right? This is not saying, oh, shit, like, we just had terrible sales to Canada and the EU. We don't have the money to, like, keep this distillery open. This is them making a determination that the market's not going to actually get better. Well, they may also have a lot of inventory on hand, right? Because the bourbon stays good for a while, one hopes. So it may be the case. I don't know, not if we let Sam lose in the stock room, I guess.

But yeah, so it may be that they're clearing out inventory, but yeah, it does portend sort of a poor forecast for what they expect the market to be like in the next few years. And Trump is going to be around for a few more years and probably will have continued to enrage our trading partners around the world even long after he is gone. I think that, as we have discussed many times over at the bulwark, the damage of Trump administration policies and luster and everything else will long outlast this administration. All right, Sonny, you consume a fair amount of bourbon. I have my share. What do you make of this? No, it's really interesting having watched the various bourbon boom and bus cycles over the years kind of play out because they happen in weird ways, like a few years back, you know, shortly after I like got seriously into drinking. You know, because in college you just drink, you just drink Jim Beam, and that's like, that's fine.

And then you get a little, you get a little more serious into it. You get, you know, the different, different, you get to the makers level. Tase. And then you get a little bit higher. You step up, you get beyond makers. You get beyond North Creek. You know, you start getting into the Willits and whatever, the Buffalo Trace heritage labels, et cetera. And it is, it's interesting to watch this play out because there was a big, there was a big boom when China really got into spirits.

So China gets into spirits. prices go way up stuff gets harder to find for a while there was there was a there was a very controversial story a few years back jim beam was going to change their formula to decrease uh the proof so they could stretch the bottles further to to meet the demand in china this was a very um big thing and then that that ended up getting kind of walked back uh and now obviously it is not as big a problem and so there are there are other there are other factors in play here there's a there's a health factor in play right now right like people are drinking less just in general because right They're, you know, there's a Zempec and everything else.

Like, there's, there is a decrease in demand. There's a decrease in China. The Chinese economy was hit very hard. I think their imports of foreign, of American whiskey was down six or seven percent over the last couple of years. So, like, they're importing less. But the, but the, the Canada thing is crazy. I just want to read, I want to read the line from the press release. Catherine kind of alluded to it here, but it was, it was crazy.

Let's see. Swanger said, so the Distilled Spirits Council of the United States CEO and President Chris Swanger said, nowhere is this shift more pronounced than in Canada, where U.S. Spirits exports plummeted 85% falling below $10 million in the second quarter of 20. That's crazy. 85%. That's like an extinction level event. Now, of course, Canada, not as big as the United States and whatever. But the anger, the anger and the frustration with the Canadians to against America right now is something else. And this hurts. Look, this doesn't hurt me.

It's actually all of this benefits me, the bourbon consumer because there's more. Until the booze companies go out of business. Well, until they go out of business. But no, but like it's the stuff in America, I have already noticed this, is a little bit cheaper than it has been. American-made bourbons are easier to access and slightly cheaper than they have been in recent months. So this is fine for me, but it sucks for, it sucks for Kentuckians. It sucks for the people in Kentucky. In 2016, 63% of Kentuckians voted for Donald Trump. In 2020, it's 62%. In 2024, it's 64%. The gym beam distillery employs 1,000 people. A lot of those people are going to be idled.

And this is entirely because of the, like, again, trade war against Canada, of all of the bizarre economic things that have happened over the last 12 to 18 months, that was by far the weirdest. Like, trying to pick a fight with Canada made no sense whatsoever. And we're seeing, we're seeing the fruits of it in this, in this very specific, but like, again, very important industry to, to a, an entire state of the union. And by the way, I should mention that it's not only counter tariffs in Canada, there are some provinces that just like banned the sale, like they have state-owned

alcohol stores. And they just took all of the U.S. booze. Well, that was what I was going to bring up because we actually one of the editors at the Bullwark, Martin Wendell Jones, lives outside of Toronto. He came on, and he and I talked about this. This actually got me a little bit in trouble

with our community because I was laughing. at the absurdity of it all, but they thought I was laughing at Canada. I wasn't. I love Canada. But he was talking about the liquor stores in particular where you would go in and all the American spirits were off the shelves, just gone. You couldn't get it. And then he told me about this thing called Maple washing. Have you guys heard of Maple washing? Yes. So Maple watching is just basically disguising an American product and pretending it's made in Canada in order to try to sell it. So this was a thing. And we were up in Toronto for the live show, you know, people were mentioning this, just sheer anger, bordering on disgust, but also sort of confusion

over why the United States government had gone to trade war with Canada, did not make any sense whatsoever. Actually, leads me to a question for you, Katha, though, because one of the things I've been curious about is, you know, we're picking all these fights with different nations. I had presumed that one way that we would have seen pushback is by those nations kind of banding together to form their own collectives, right? you know, their own trade agreements. And I think we have sporadically, but I guess maybe I'm ill-informed, but I'm surprised we

haven't seen more of that. Actually, there's been a lot of activity on that front, and it's been going on all year. In some cases, pretty astonishing some of the alliances. So, like, Japan, Korea, and China, South Korea and China all got together earlier this year. I think for the first time in like five years or something to have that. talks. And if you know anything about the history of those three countries, they do not like each other particularly well. And Trump has managed to bring them together. So I think that's just one example. But you see a fair number of other cases where we are uniting the world. We're

just uniting them against us because they're pissed off about our trade policies, about the other erratic things that our president and his administration has done, you know, not only on trade, but threatening to invade Canada and sees it as, as a 51st state threatening to invade Greenland. Like there's a lot of other reasons that he's pushing other countries closer to each other and against us. But trade is certainly one of them. And it's something that's easier for them to remedy, right? That if they're mad that like they think that their own exporters are being unfairly treated in the United States, they're going to seek customers elsewhere. They're going to seek customers in China. You know, like part of the reason why Barack Obama really sold the

Trans-Pacific Partnership, old enough to remember that back when he was president, the whole idea was to have a coalition of countries kind of gang up against China on trade. It was going to be us and a host of other countries around the Pacific, Pacific Rim, and that the idea was that we were going to make it easier to trade amongst ourselves and set the rules of the road on trade in a way that would eventually, hopefully, pressure China to reform its own behavior. And instead, of course, Democrats were against it when other Democrats in Congress were against it when Barack Obama was president. on Trump's first day in office in his first term. He tore up the agreement. And then the remaining country signed their own agreement. And it helped them, right? It hurt us. Right. We're seeing different iterations of that today. So, Sonny, I guess I'll ask you sort of to get in the mind of a Republican politician at this point, right? You've spent your career touting the importance of

free trade, lower tariffs. The president comes in, jacks up terror, starts trade wars, domestic industry struggles in light of that. And yeah, maybe the consumer is getting a little bit cheaper domestic bourbon. There's only domestic bourbon. A little cheaper bourbon. But if you're a Republican politician, if you're Rand Paul in Kentucky, like, what do you do here? I mean, do you just rail? I don't know.

And why not? Yeah, I don't know. It's a great question. And it's interesting. The politics of it are interesting, too, because one of the reasons Jim Beam is slowing down the sales of this is because, in Kentucky, one of the things that they tax is aging barrels of whiskey. So if you have barrels just kind of piling up, you end up spending more in taxes. I think the numbers I saw that Kentucky distillers were paying 27 percent more in taxes this year. So maybe you look for

relief there. But like I if, you know, there's the problem with trying to formulate a rational response to what Trump has done here is, is there, there is there, there is. There is. is no rational response because he has, as you said, threatened to make Canada the 51st state. Like, how do you respond to that in any, in any rational way? I just want one quick instant correction from me. I mentioned the lowering of the proof. It wasn't Jim Beam. It was Maker's Mark.

I knew as soon as I said that, it was wrong. But same basic, same basic idea here. Yeah, but you just protected your cred, which was what it really mattered. I was going to get yelled at. I probably will still get yelled at it's still get yelled at it's fine um but the uh but no it's i like i don't how to what does what is ram i mean look ram rann is different ran will do ran things but a random kentucky cent republican right it's like i'd be pissed say what you will about rand paul and i have a lot of issues with a lot of his uh stances particularly on foreign policy

but like he will just say what he thinks and he and he and it's a it is a conservative a conservative enough state that he can get away with that. He has his, he has his constituency and I think he can do that. And that's good. I think it would be great. There is a Senate Republican primary to replace Mitch McConnell right now. There's a Senate Republican primary to replace Mitch McConnell right now. And you're kind of in a spot where you can't criticize your leader for these trade wars because you need him to support you. It's a weird spot. Well, if you look at the the counter tariffs that were put in place in Trump's first term, they deliberately targeted the districts that would be politically sensitive. So they deliberately targeted bourbon, for example, as well as

motorcycles because Harley Davidson has a manufacturing plant. I guess I think it was in Paul Ryan's district back in the day. So this was a strategic choice by other countries back then. This time around, you know, they've taken slightly different responses that they're not necessarily all counter-tariffing. They're like, you know, as we've discussed, they've been, teaming up with other trading partners and just trying to cut out the United States or at least displace some of the lost business there. And I think that they're just hoping that the pain will be so bad here in the United States that Trump will eventually have to roll back his tariffs. And he has to some extent. And then what we haven't gotten into is the fact that like Supreme Court is

probably, yeah, the Supreme Court is probably going to strike down most of Trump's tariffs. But that's the point. So, but wait, to your point, though, it's like, let's say the court does strike it down. It doesn't re-ignite any sort of global goodwill towards Trump, right? Like, Canadians are not going to suddenly like, all right, well, we'll restock those shelves. We're going to take off the fake people washing. Thank you, Robert's court. Yeah, no, of course not.

Yeah, it doesn't change things. Of course not. And the Trump administration, if they were smart, they would take the win. And as I've written before, they would take the win when the Supreme Court is likely to strike down most of his tariffs and then the money is going to go, you know, all these companies in the United States are going to get a rebate and it wouldn't have a nice little shot in the arm for the economy because it would be basically a stimulus check because of these tariffs coming back. And maybe companies would be able to plan again in terms of what they buy and hire and invest in and all of that

stuff. And maybe we can start to repair some of those relationships that have frayed with these other countries. But none of that stuff is going to happen, most likely what's going to happen instead. is that the Trump administration is going to try to cobble together other tariff authorities to reconstruct all of the tariffs that have been in place. And those, you know, those are on more solid legal footing. They'll take some time. But in the meantime, we are continuing to piss off everyone domestically and internationally. Yeah.

All right. Well, here's to you guys. Appreciate the talk. I'm not going to drink this. It's still pretty early today. I won't do you. I mean, somebody out there might. That's fine.

It's fine. Just there you go. There you go. Catherine Rampel, Sunny Bunch, thank you both. Thank you guys for watching. Please subscribe to the feed. Like this stuff. Algorithm is King.

Talk to you soon.