In Kentucky bourbon country, the prospect of a trade war feels like a hangover that won't go away

LAWRENCEBURG, Ky. — In the rolling hills of Kentucky where most of the world's bourbon supply is crafted, the prospect of a new trade war feels like an aching hangover that won't go away.

Kentucky bourbon producers again find themselves in the crosshairs as a target for retaliation after President Donald Trump ordered new tariffs on U.S. neighbors Canada and Mexico. On Monday, Trump and the leaders of Canada and Mexico put their planned tariffs on hold for a month to allow further negotiations. But the lack of a final resolution has left some elected leaders and industry officials concerned about one of Kentucky's iconic spirits.

American whiskey exports slumped badly amid an earlier trade dispute during Trump's first term.

Before the monthlong reprieve was announced late Monday, Canada, a key export market for American spirits, responded to this latest outbreak of trade warfare by initially ordering tariffs on American imports including beverages. Some authorities in several provinces had planned to remove American liquor brands from government store shelves.

The latest back-and-forth is a sobering prospect for Kentucky bourbon producers and their supporters. The bourbon industry pumps $9 billion into the Bluegrass State's economy each year, creating more jobs and attracting more tourists than ever before, according to a study released last year. Kentucky distillers produce 95% of the global bourbon supply, according to the Kentucky Distillers' Association.

Bourbon production is part of the economic lifeblood of Lawrenceburg, a short distance from the distilleries for well-known brands Wild Turkey and Four Roses. In a place where support for Trump runs deep, some said they had faith in wielding tariffs as a way of gaining leverage in negotiations with other countries.

''I think it's time for our nation to stand up for our nation. And that's what we're doing right now,'' said Lawrenceburg resident Gary Chilton as he ran afternoon errands. ''Other nations have taken advantage of us for so long. It's a negotiating tool. It'll get worked out.''

Kentucky Democratic Gov. Andy Beshear warned that tariffs will hurt working families in a state that voted overwhelmingly last November for Trump. The pain won't be limited to distilleries, but will include segments that support the industry ranging from farmers to barrel-makers, said Beshear, who is widely seen by political observers as a potential candidate for president in 2028.

''A state that voted for this president by more than 30 points is going to feel the impact of these actions,'' Beshear said in video posted to social media Sunday.

Republican U.S. Rep. Andy Barr, whose district spans the heart of Kentucky bourbon production country, remained supportive of Trump amid the uncertainty hanging over the industry.

''Other nations have forgotten that the United States is the world's superpower, and under President Trump's leadership, they are quickly remembering that we will no longer be taken advantage of," Barr said in a statement Monday.

Barr said he was committed to protecting the bourbon industry, "a vital engine of jobs and economic growth.''

Republican U.S. Senator Mitch McConnell of Kentucky, meanwhile, voiced concerns Monday about the impact of tariffs on jobs and consumer prices in the state and beyond.

''I'm all for pushing back on predatory trade practices and leveling the playing field for American producers, but I'm not a fan of tariffs,'' McConnell said in a statement. ''At the end of the day, tariffs drive up the cost of the goods and services we all rely on, and American consumers pay the price.''

The bourbon industry is hoping that cooler heads will prevail. The Kentucky Distillers' Association issued a statement Monday saying it's eager for a ''quick resolution that takes Kentucky bourbon out of the middle of a dispute that has nothing to do with our signature spirit.''

Chris Swonger, president and CEO of the Distilled Spirits Council of the United States, urged the U.S. and Canada to reach an agreement that enables the spirits industries in both countries to thrive. Many producers are boxed in by the tariffs, he said.

''Some spirits are recognized as ‘distinctive products' by the U.S. and Canada and can only be made in their designated countries, such as bourbon and Tennessee Whiskey in the U.S. and Canadian Whisky in Canada,'' Swonger said in a statement. ''As a result, the production of these products cannot simply be moved to another country or region.''

American whiskey producers faced headwinds even before the new trade dispute. It comes as the industry has massive inventories of aging whiskeys that will someday reach the market. In Kentucky, a record 14.3 million barrels of bourbon were aging, the Kentucky Distillers' Association said recently. That inventory is awaiting bottling at a time when younger adults appear to be drinking less alcohol.

The biggest threat could be looming overseas, where the European Union is set to reinstate tariffs on American whiskey at a whopping 50% rate in late March if nothing is done to head it off. Trump told reporters Sunday that import taxes will ''definitely happen'' with the European Union and possibly with the United Kingdom as well. The return of tariffs in the biggest export market for American whiskey would be devastating, Swonger has said.