Now the on-again, off-again threat of tariffs has disrupted those plans.
Efforts by the Black-owned distiller to gain a foothold in Canada are on hold, as are plans to break into Germany and France, said Brough Brothers Distillery CEO Victor Yarbrough. That’s because the iconic American spirit’s widening global appeal is caught in the crossfire of trade conflicts instigated by President Donald Trump.
“It’s extremely frustrating,” said Yarbrough, who started the Louisville distilling company with his brothers, Bryson and Chris. “We are collateral damage.”
For distillers looking to sell to consumers of all political stripes, talking politics can be as distasteful as discussing Prohibition.
But along with the turmoil and uncertainty over tariffs, bourbon makers and other U.S. firms trying to do business in Canada are confronting public relations challenges still reverberating from the president’s blunt-force “America First” approach to international relations.
With Canadian hockey fans booing the U.S. national anthem and some liquor stores north of the border clearing American spirits from their shelves even before there’s clarity over tariffs, businesses like Brough Brothers are watching to see how the trade conflict plays out.
In the building being converted into the new distillery near the Ohio River, drywall dust covers the floor of the project that the brothers hope will raise the company’s profile in the ultra-competitive bourbon world.
“I believe there’s going to be some type of repair of the relationships that needs to happen,” said Yarbrough, who was hoping, before the trade war erupted, to introduce his bourbon in New Brunswick and later expand to Ontario and other parts of Canada. “So I think some type of media blitz, PR blitz is definitely going to have to take place.”
The trade wars pose an immediate threat to an American-made success story, built on the growing worldwide taste for bourbon, Tennessee whiskey and other products.
Kentucky Democratic Gov. Andy Beshear said the president’s zig-zagging tariff policy is hurting the American economy and will lead to higher consumer prices while disrupting business.
“It’s not just the imposition of tariffs, it’s this month-to-month, ‘I may do it to you at any moment’ policy,” said Beshear, a potential presidential candidate in 2028. “You can’t create stability.”
Trump on Thursday postponed 25% tariffs on some imports from Canada for a month amid fears of the economic fallout from a broader trade war. Yarbrough said his company’s expansion plans are still in limbo.
“It doesn’t change our situation,” he said. “Just as quickly as it changed to a reprieve, it could just as quickly turn into next month that we’re back on.”
Trump on Thursday postponed 25% tariffs on some imports from Canada for a month amid fears of the economic fallout from a broader trade war. Yarbrough said his company’s expansion plans are still in limbo.
For an industry that has to plan well into the future, based on aging its whiskey products, such angst is widespread in Kentucky, which produces 95% of the world’s bourbon supply.
At this point even a delay in tariffs wouldn’t alleviate the practical problems confronting U.S. whiskey makers.
“The issue for us is long-term planning, and a postponement does nothing for us in long-term planning except leaves it still up in the air,” said Judy Hollis Jones, president and CEO of Buzzard’s Roost in Louisville, which sells to two provinces in Canada and has been looking to expand.
“Maybe other people adapt to it easier than I do, but I tend to like some certainty,” Jones said.
The Kentucky Distillers’ Association says the newest trade conflicts feel like deja vu. The industry group has long sounded the alarm that tariffs and retaliatory levies would wreak havoc on the spirits industry. Along with the North American trade dispute, the European Union is set to reinstate a tariff by April 1 on American whiskey if nothing is done to head it off.
That trans-Atlantic dispute is a reprise of Trump’s first-term tariffs on European steel and aluminum. The EU’s retaliatory tariff caused American whiskey exports to the EU to plunge 20%, costing distillers more than $100 million in revenue from 2018 to 2021, the Distilled Spirits Council says. Once the tariff was suspended, EU sales rebounded for American distillers.
Now, Europe’s infatuation with Kentucky bourbon and other U.S. spirits is threatened by the potential 50% tariff — double the previous levy — that would inflict “irreparable harm to distillers large and small,” said Chris Swonger, the council’s CEO.