This article discusses the potential impact of a new 25 percent tariff on Scotch and Irish whiskey exports in retaliation for U.S. proposals to lift taxes on bourbon. The tariff, which is currently being considered by the European Union, has led to concerns in the whiskey industry about the toll it will have on distillers, retailers and drinkers. Retailers warn that the new tax could drive up prices for consumers, while distillers claim that firms in rural areas will be hardest hit. Nevertheless, whiskey will remain an important category in the spirits market, and the article explores the possible market effects of two future scenarios: a bad one, in which a global recession follows the imposition of tariffs, and a good one, in which whiskey sales grow until they become a significant part of the spirits’ market share. The article also suggests that the whiskey category’s high price will make it less vulnerable to tariff-related price competition than the vodka and rum categories, and that the Scotch and Irish whiskey makers may have greater ability to absorb traded tariffs due to their greater scale. Overall, the article raises questions about the potential economic and personal impacts of the tariff on whiskey makers, drinkers, and the broader economy.
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