The trade body representing the US spirits industry has formally urged the Trump administration to make distilled spirits exempt from current and future tariffs.
Distilled Spirits Council of the United States (DISCUS) president and CEO Chris Swonger testified before the Section 301 Committee yesterday (7th May), warning that tariffs are ultimately harmful to the domestic distilling industry.
The Section 301 Committee was established by the Office of the US Trade Representative (USTR) back in March. The Committee is investigating US trade deficits, particularly with regards to 16 nations, and many believe the findings could lead to new tariffs being introduced.
However, Swonger argued that tariffs are costly to US distillers and exemptions are necessary to protect U.S. jobs, support the hospitality sector and encourage American export growth.
Swonger told the Committee that the sector generates more than $250 billion in economic activity, supports approximately 1.7 million U.S. jobs and sources more than 2.7 billion pounds of grain from American farmers.
“America’s spirits industry is a powerful economic engine,” said Swonger, before warning: “But the U.S. spirits and hospitality sectors are facing significant economic headwinds. A slowdown in the spirits market, combined with ongoing trade frictions, has started to result in year-over-year job losses at U.S. distilleries.”
He presented recent data that detailed the downturn. Last year, domestic spirit sales dropped for the first time in nearly a decade, falling 2.2%. Exports also fell by nearly 4% in 2025. As a consequence, almost 1,000 jobs have been cut in America’s distilling sector between September 2024 and September 2025.
Swonger described tariffs as “an additional strain on the sector,” and highlighted how they negatively affect the hospitality sector: “Alcohol sales are particularly consequential for restaurant profitability, accounting for 21% of the total revenue for full-service restaurants. This underscores the outsized role these products play in sustaining the broader hospitality sector.”
Retaliatory tariffs are another factor that Swonger warned against. When the EU introduced tariffs on US spirits between 2018 and 2021 in response to US import taxes, American exports to the bloc fell by 20%.
More recently, US spirits exports to Canada plummeted by 63% last year after a number of Canadian provinces removed American-made goods from store shelves amid trade tensions.
“Even the threat of tariffs creates uncertainty, negatively impacting exports,” Swonger said.
Swonger concluded by urging the administration to make spirits exempt from tariffs, encouraged preserving existing open markets like those with the UK and EU, implement newly agreed deals as soon as possible, and pursue new agreements in key markets.
“These steps will support the administration’s goals of increasing US exports and creating good-paying American jobs across the hospitality sector,” he said.
This news came days after President Trump suggested that he will scrap the tariffs on Scotch whisky following King Charles’ state visit. Check out our recent article “Trump to Dump Scotch Tariff After Royal Visit” for more information.
