Whiskey on the rocks: Irish whiskey distillers caught in the crossfire of US-EU trade war
Casks stored in Dingle Distillery. 40% of the €1bn in whiskey exports went to the US last year. Picture: Domnick Walsh
With a tit-for-tat trade war on the table, the European Union is hoping for more talks with US officials to avoid unnecessary harm on both sides of the Atlantic.
Its retaliatory measures, which were proposed in response to 25% tariffs on European aluminium and steel, have been delayed until mid-April to allow for further discussion, but for now, they include a proposed 50% tariff on American whiskey.
Responding to the potential measures, US President Donald Trump threatened a 200% tariff on all alcoholic products imported from the EU.
Now, Irish drink businesses hang uncomfortably in the unknown, with the future trading landscape of the US clouded in worrying uncertainty.
Perhaps the most vulnerable industry to prospective US tariffs, Ireland’s whiskey distillers could find themselves caught in the crossfire of what could become a brutal trade war.
Their exposure is stark, with 40% of the €1bn in whiskey exports going to the US last year, making it a major international market for Irish distillers.
“The biggest problem here is uncertainty,” says Elliot Hughes, managing director of Dingle Distillery.
Speaking to the Irish Examiner, Mr Hughes said that while he doesn’t believe 200% tariffs will come to fruition, punitive measures of any scale will have a detrimental impact on business.
I think 200% is a bit extreme. I think something more realistic is around 50%. Even then, though, we sell whiskey to the US at $60 a bottle. That means we’re now looking at $90 if the US implements its reciprocal measures on the EU.” Founded in 2012, the distillery produces whiskey, gin and vodka and employs around 30 people in the Dingle Gaeltacht.
Mr Hughes noted that while its market in the US is small, tariff threats are likely to delay expansion progress even further throughout 2025.
“We have been slow to grow in the US. We aimed to have about 15% of sales come from the US market by the end of this year, with us being around 11-12% now. But given everything that is happening, we may have to reconsider those targets.” However, Mr Hughes noted that the threat of US tariffs has pushed the distillery to look further afield to newer markets.
“I think this has really shown us the importance of not having all your eggs in one basket. It has given us the kick to diversify our market. We are currently eyeing up other EU markets, Asia, and are looking to launch in Nigeria soon.” June O’Connell, founder and director of Skellig Distillery, which makes Skellig Six18 Whiskey, said that in addition to hiking prices, any tariffs on Irish alcohol would lead to a series of damaging knock-on effects.
"In the context of Irish whiskey, 95% of what is made in Ireland is exported. The US only exports 15% of Bourbon, which is tiny by comparison,” Ms O’Connell told the Irish Examiner.
“The US is very important for us. People in the US understand Irish whiskey, they like it, and they buy it. Any tariff, whatever the percentage, is not good. Margins are already very tight, and a tariff of any kind will have a detrimental impact on business.” Founded in 2019, Skellig Distillers has already established itself in the US, currently operating in Ohio with further expansion coming in May when it will launch in Washington DC and Maryland.
“This was part of a plan that took a full year. These things take significant time and investment to get to this point, there are federal rules, state rules that must be followed. Shipping alone from Ireland takes three months.” With potential tariffs now in the pipeline, Ms O’Connell says there is “huge concern and uncertainty” for distillers throughout the EU.
As talks continue among policymakers and industry bodies, Director of the Irish Whiskey Association, Eoin Ó Catháin said that in order to protect European distillers, US bourbon must be removed from the EU’s tariff list.
“The US is the most important international market for Irish whiskey makers. We’ve already seen price hikes and other turbulence in the sector, so another rise like this will be impossible to absorb,” Mr Ó Catháin told the Irish Examiner.
“We’re also very disappointed with the European Commission. US bourbon should not be on the list.” “We export far more alcohol than we import. We don’t want any part in this, and the EU needs a further strategy to ensure we don’t get into a tit-for-tat trade war.” “The EU are negotiating on our behalf and they know what they’re doing,” Ms O’Connell added. “We just hope whiskey doesn’t get caught in the crossfire. The EU has far more to lose on that one.” The distillery owner added that when bourbon was put on the list in 2018 in response to the first Trump administration, it was done so to target red states, along with companies like Harley-Davidson and Levi Strauss.
“No tariffs can change the fact that Bourbon whiskey can only be made in America and Irish whiskey, Irish cream and French Cognac cannot be made somewhere else,” Ms O’Connell said.
“But now, the landscape in 2025 has changed, and so it might be timely that the list should be reconsidered accordingly.” Speaking on the industry’s reliance on the US, she noted: “It takes an awful lot to grow in a new market. In the US, we have more than 25 years of shoe leather.
“It's not just as easy to call up a new market and ship over a container of whiskey and away you go. It takes years to build that consumer awareness and demand.” “We also have a growing whiskey tourism sector,” Ms O’Connell added.
“Whiskey tourists stay longer and spend more. And they come off-season. They also contribute to the local economy with the hotels they stay in, the taxis they get and the restaurants they eat in. This all gives a major boost to the economy.
“If you can’t buy Irish whiskey in the US, or if its very expensive the shelf space with drastically reduce, you’re cutting on that exposure to Irish whiskey and Irish cream, curiosity, and the domestic tourism industry will suffer.”
