Many of you may have heard consumers are bearing the brunt of the Trump administration’s tariffs. However, this is not the case for the multi-billion-dollar bourbon whiskey marketplace.
Instead, these tariffs are affecting which bottles appear on your shelves, their availability, and market priorities.
For the American whiskey enthusiast, that means tariffs are shaping the game in ways that are not always obvious at your checkout counter. You may not see a tariff surcharge on your receipt, but those policies influence which bottles make it onto your local shelves, how often they show up, and whether your favorite everyday pour gets redirected to a higher‑margin market overseas.
Some distillers we spoke with observed that tariffs have actually helped their businesses by making overseas expansion more attractive or necessary, as domestic constraints make finding new markets more difficult.
Expanding Markets Overseas
Early in 2025, the tariff wars were raging, and bourbon became embroiled in the mess.
Bourbon distillers were quite upset as the European Union (EU) was promising high tariffs on bourbon if President Trump hiked tariffs on the EU. But the temperature has calmed considerably since those days.
Today, the EU imposes NO tariffs on the bourbon whiskey industry, while the US does impose a 15 percent tariff on spirits imported into the USA from the EU.
Mexico and Canada’s trade relations were also tumultuous. But while tempers flared a new calmer reality set in. Currently, Mexico imposes NO tariffs on the whiskey industry, while the US imposes a 25 percent tariff on most goods imported from Mexico into the USA. These are goods that qualify under the previous USMCA trade agreement still see no tariffs in either direction.
The official position of the DISCUS (Distilled Spirits Council of the United States) is a strong preference for a zero percent tariff environment.
Does any of that even matter?
This is a relevant question. If the U.S. makes up the vast majority of the market for bourbon whiskey, then it might not matter much if other countries were to tariff our whiskey. And this is in fact the case.
The U.S. accounts for as much as 90% of the bourbon whiskey market. DISCUS reports that in 2024, U.S. domestic sales of American whiskey (including bourbon) generated $5.3 billion in revenue.
By comparison, total global exports for all U.S. spirits were $2.4 billion, with American whiskey exports accounting for $1.3 billion of that. The domestic market is significantly larger than all export markets combined.
Exports Are a Growth Opportunity for American Whiskey
If the American market is fully developed, then how can the worldwide whiskey market grow if distillers can’t get their product into overseas markets?
Overseas markets make up a nice growth opportunity for bourbon whiskey. Since Mexico does not tariff bourbon imports, it allows distillers to break into that market with new offerings that appeal to that population. And apparently, the Mexican population is loving agave-infused bourbon whiskey.
A master distillery colleague of Whiskey Shenanigans from Texas, Mike Cameron of Devils River Whiskey, is expanding into the agave market. Mike spent a lot of time in Oaxaca and Jalisco learning about not only the tequila and mezcal industry, which are similar to the bourbon industry.
“I think we’ll see bourbon start to make bigger moves in other countries, specifically India, which is one of the largest whiskey-consuming countries in the world,” Mike said.
“India currently has a 100 percent tariff on American spirits coming into their country. I’m confident that India and the US will work out a trade agreement for spirits that will allow the bourbon market to open up in India.”
The global market for American whiskey is substantial. According to DISCUS, the top international markets in 2024 for American whiskey were:
- European Union: $699 million
- Australia: $113 million
- United Kingdom: $86 million
- Japan: $79 million
- Canada: $73 million
Premium Brands Have Continued to Do Well
Companies that focus on higher-end premium brands are doing well, while those that have lower-end non-premium brands struggle.
There are few publicly available financials that represent just one company, but we did analyze both MGP and Brown-Forman (Jack Daniel’s, Woodford Reserve, Old Forester, and more).
Most people may be familiar with Brown-Forman but not with MGP, but likely have heard of its brands, like Luxco, Ezra Brooks, Yellowstone, and others.
The trend in the industry is that sales in 2025 are down (MGP revenue down -18.9% while Brown-Forman is down only -5 percent), sometimes by single-digits and sometimes by double- digit percentages.
MGP is interesting because it used to be a bulk distiller, but has shifted with the new trends to focus on those premium brands. In fact, not only the much smaller MGPI, but also the giant Brown-Forman has followed the same strategy, focusing more on the premium brands.
Companies that shift with the times will survive as long as they don’t run into other problems, whether in manufacturing or distribution.
Craft Distillers are Getting Rattled
According to the American Craft Spirits organization project report for 2025, the number of craft distilleries has declined from over 3000 to 2,282, and distillery volumes have declined in 2024 compared to 2023 by -6.1 percent year-over-year ,while sales during that same time declined, reaching $7.6billion in sales, a -3.3 percent growth rate.
Craft market share as a percentage of the overall whiskey market is down, exports are down 20.7 percent, and employment in the craft industry is also down for the first time, reaching only 28,628 full-time domestic employees (down from 29,373 in 2023). 2025 doesn’t appear to be the rebound year for the craft industry either.
The top ten craft distillers by state:
- California
- New York
- Pennsylvania
- Texas
- Washington
- Wisconsin
- Colorado
- Florida
- Oregon
- Kentucky
It turns out there is a small number of large craft distilleries (only 1.4 percent are “large”), but they produce over 50 percent of all the volume of craft spirits in America.
Some Alternative Growth Ideas
Developing markets such as India, Vietnam, Mexico, and the UK should be high priorities.
And like the larger distilleries that focus more on higher-end product offerings, the craft makers should also start focusing more on higher-end product offerings in America, and appeal to the individual tastes of each international market.
Craft distillers tend to over-focus on their local market and under-focus on the international distribution markets that might boost their sales.
The Whiskey Reviewer suggests turning into the skid and producing some cannabis-infused whiskey. “The simplest route to combining marijuana and a whiskey cocktail is to infuse the whiskey itself with cannabis,” they said. They think rye makes the best flavor combination with cannabis, but bourbon could work as well.
Far From Whiskey’s Last Call
Craft distillers in particular and the entire whiskey and spirits industry in general feel like they are being hit by a Gen-Z population that thinks cannabis is healthier than alcohol.
Hope for the whiskey industry is not lost. One suggestion I have is for the larger distillers to make their higher-end products more readily available.
Manufactured, tariff-driven (some might call “fake”) scarcity may drive up prices in the short run, but only when people can easily purchase and enjoy a product will the larger distillers grow the overall bourbon and whiskey markets.
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