Alcohol

Trump's Trade War Is Harming the Craft Booze Business—and Dragging Down the Rest of the Economy in the Process

Catoctin Creek Distillery's tariff woes show that no one wins a trade war.

|

Catoctin Creek Distilling

For most Americans, trade policy has a tendency to seem abstract, even invisible. Price tags on store shelves don't break out the cost of tariffs. When a company affected by tariffs sheds staff or fails to expand, there are often additional factors at play. Trade agreements themselves tend to be mind-numbing in their complexity, the sort of legalistic documents that only experts ever really read, and arguments about free trade are often heavy on theory or built around dull statistics. Economic policy counterfactuals are inherently speculative; with different trade policies in place, who's to say what would have happened?

And yet it's clear that the trade war Trump started with Europe is having a measurable impact—on, among other things, domestic craft liquor.

After the Trump administration erected tariffs on imported steel and aluminum, the European Union responded by creating new tariffs on goods produced in America, such as bourbon and rye whiskey. As a result, some domestic liquor producers have largely been cut off from the European market. Among those affected is Catoctin Creek, a small Virginia distiller that makes rye, gin, and high-quality fruit brandy.

As The Washington Post reports, Catoctin Creek was set to expand in Europe, where the market for American whiskey has grown considerably over the last 15 years. Instead, the tariffs have killed off nearly all of the company's European sales opportunities. The company has instituted a hiring freeze, delayed plans to buy new distilling equipment, and slowed orders from the farmers who supply the grains required for making whiskey. "It's essentially decimated our European business, and it's put our expansion on hold," Scott Harris, one of Catoctin Creek's co-founders, tells the Post.

Catoctin Creek's story shows how the trade war harms everyone involved in the process. It's the entire trouble with the trade war in miniature. It's bad for the owners, who have lost access to a market with a lot of potential for growth. It's bad for consumers in Europe, who lose access to the product. It's bad for for consumers in the U.S., who are likely to face higher prices—on top of already high prices caused by recent increases in demand for whiskey—as Catoctin looks up to make for the loss of expected revenue from European sales. It's bad for people who drink and design cocktails, because it makes interesting ingredients more difficult to obtain.

It's bad for the manufacturer that makes the stills Catoctin Creek might have purchased to help increase production for the global market. It's bad for the farmers who grow the rye and other grains the company uses to make its product. And just as the people and companies who do business with Catoctin Creek were affected, so will the people and companies who do business with those companies, and so on and so forth, in an ever-expanding spiral of economic decline. A trade war drags down everything it touches. It produces no winners.

On a day-to-day basis, these effects are hard for most people to see: Even if you're a regular consumer of Catoctin Creek liquor,* you probably won't notice a huge price difference unless you buy in bulk. If you live in Europe, it's likely you never had regular access to their product in the first place. And the company doesn't appear to be laying anyone off, so it's hard to count the jobs that simply were never created.

On the surface, the trade war may not look like it's doing much damage. But it is, and even if its effects are hard to see, we shouldn't forget what it's costing us.

*If you like good booze, you should be. I especially recommend their line of fruit brandies, which are produced the old-fashioned way, using fresh fruit that is juiced, fermented into a wine, and then distilled into an unsweet spirit, somewhat like Cognac. Try their peach brandy in a classic Philadelphia Fish House Punch. I promise your life will be better for it.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

54 responses to “Trump's Trade War Is Harming the Craft Booze Business—and Dragging Down the Rest of the Economy in the Process

  1. Trump’s Trade War Is Harming the Craft Booze Business?and Dragging Down the Rest of the Economy in the Process

    The economy has been harmed for decades by foreign trade restrictions.

    But hey, if Trump dropped the tariffs, everything would be fantastic says Suderman.

    The fact that trade restrictions cost businesses far more than Trump tariffs is no big deal, according to Suderman.

    The most important thing is to not have Trump tariffs. Everything else does not matter, according to Suderman.

    1. ==== hypocrisy ====
      loveconstitution1789|12.3.18 @ 10:20AM|#

      Do you need me to link the rules of NAFTA and USCMA so you can compare and contrast the “worseness” for us?

      1. LC is an empty-headed statist bitch who believes in government arbitrarily punishing free people when they wish to peacefully engage in trade with whomever they choose and regardless of boarders.

        He does not believe in consumer sovereignty and believes the government is best suited to ” manage” the economy.

        I’m sure he was all in with Obama’s tax, I mean, tariffs on imported tires.

        LC is a cheerleader for the collectivist state. What a kunt.

        1. Poor trolls….I mean Hihns.

        2. Peter, that’s bullshit. International trade IS managed by governments. That isn’t LC’s fault. He’s just acknowledging reality and trying to work with said reality.

          That doesn’t make him a statist. Also, Trumo’s strategy appears to be working. The Chinese are backing off on a trade war and talks are supposed to resume soon. And for the first time, America is selling rice to China.

          At this rate, maybe Trump will be selling ice to Eskimos.

          1. Haha. “Peter”.

            Right.

      2. You always comment on this, but we both know you have never fully read either. It’s the weirdest appeal to authority I’ve ever seen. “Here’s two bills I’ve never read to prove my subjective belief one is worse than the other.” Just weird.

      3. Poor troll’s script cannot add new material.

    2. So let’s harm it worse by adding more?

      1. Do you believe global trade was in a static state prior to Trump?

      2. Using leverage to get China, The EU, Mexico, and other trading partners to lower their trade restrictions is the worst kind of harm?

        I think letting our trading partners think they keep high trade restrictions so it hurts American exporters is worse harm.

        1. Pretty much. Telegraphing weakness and submission just means they will take advantage. Deep down, they k ow they need us far more than we need them.

    3. Wow, you really decimated a nonexistent part of that argument. Kudos.

      1. Poor troll.

  2. I give Suderman credit for timing. The day the economy is reported to have created 312,000 jobs in December, Suderman breathlesssly informs us Trump is dragging the entire economy down. Well played.

    1. Face it, the economy sucks. The Obama years were the best this country has ever seen, then Drumpf went and ruined everything just like Paul Krugman said he would.

      #UnbanPalinsButtplug

    2. Yep. I’m not in favor of trade restrictions, but some people are winners in that game, so it’s pretty weak to use an example of one industry that might be hurting while the economy is smoking.

      1. Keyword is might.

        1. More like Suderman provides no evidence besides what someone says.

          No contracts. No supporting evidence besides what some crony capitalist is saying to get sympathy.

          1. He just needed some flimsy premise to fill his ‘Trump Sucks’ quota of articles for the week.

  3. I especially recommend their line of fruit brandies, which are produced the old-fashioned way, using fresh fruit that is juiced, fermented into a wine, and then distilled into an unsweet spirit, somewhat like Cognac.

    What the hell is the new-fashioned way?

    1. That is a really good question. Last I looked Brandy was made by fermenting wine (this as opposed to wiskey which is made by fermenting beer). Maybe Suderman knows of some new way to do it. Or maybe Suderman is just a sucker who will believe any sales pitch.

      1. I believe you meant distilled, not fermented.

        1. Potato tomatoe

          1. Hello

    2. OMG. First, Robby gets tagged as Fruit Sushi do we now have….Fruit Brandy?

      Peter don’t walk into these things! We’re not mature enough to resist.

      1. This is actually more funny than the thing with Soave. Soave is like 15 years old and can legitimately claim not to have known any better. Suderman and his wiife are both total tight asses who pride themselves on being real beltway cultured types. This is a much funnier and worse party foul by Suderman than Soave’s fruit sushi moment.

    3. What the hell is the new-fashioned way?

      Made in China.

    4. I would like to know as well…I make strawberry and grape brandy and juicing first sounds like a new-fashioned way. There is a significant amount of sugar in the pulp…unless they juice it first then add the pulp back to the not yet fermented must (juice)…most recipes also require more sugar. Juicing seems like an unnecessary step if you are going to blast the flavors and distill the wine into brandy anyway (as opposed to drinking as wine).

  4. As a business owner myself I sympathize with any business impacted by government decisions.

    I go through this in mine as well. It’s not just tariffs that hurt businesses. Domestic regulations adding red tape and cost to bottom lines also create an atmosphere of uncertainty. In my business it’s superficial wage and price controls which serve to benefit unions and the connected. Someone is always bound to lose in this game and it won’t be the aforementioned connected.

    Politicians really need to stay out of the way. Government just need to ensure there’s security and laws to protect businesses. Beyond that, them ‘planning’ anything on this front is dubious stuff.

    1. You run a pizza place don’t you Rufus? Next time I am in Montreal, I need to frequent your business.

      1. Lol.

        No.

        Lol.

        Private daycare.

        AND NO PINEAPPLE ON PIZZA IS NOT APPROPRIATE.

        1. For some reason I thought you were a chef. I have no idea where that came from. If I happen to have a kid between now and then, I know where I can stow them for a few hours now.

          1. Well, we’re big into food in my family and I do talk about it a lot.

        2. What about sweet corn?

          1. new-fashioned way to make brandy

            1. So new-fashioned brandy is whiskey?

  5. He’s trying to get a fair deal for the country rather than having everyone cheat us…
    https://aladyofreason.wordpress.com/

    1. A Lady of Reason, have you met Lovesconstitution1789? I think you guys would make the cutest couple! You could have a beautiful life together. Your days would be filled with the pitter patter of little oompa loompa feet running through your halls…..meh

    2. A Lady of Statism

      FIFY

      1. because there were no tariffs before Trump, right? You seem like the kind of person that thinks self-defense is a violation of the NAP and worse than the initial assault.

        1. You seem like the kind of person that believes that a country economically punishing it’s own people is act of aggression towards our country. Better punish our own people in retaliation.

          1. Okay McGoo, how would you go about improving our trade deals with foreign countries without applying some kind of duress? If you have a better strategy, please enlighten us.

            1. Okay I’ll play. My biggest problem is that many people in favor of Trump’s tarrifs view another country forbidding or limiting american products as an act of aggression. To me this very dangerous and I don’t see how this could be construed as aggression. To your other question, I wouldn’t go about improving any trade deals. Specifically, what trade deal do you feel needs improving? How are we being treated unfairly and by whom? By every metric the economy is the best it’s even been and has been for the past 8 or 9 years. What do you fear will happen?

              1. Also, Trump did a very good thing by dramatically lowering the corporate (and other) tax rate. In my estimation, this alone is the single best thing he’s done and the importance can’t be overstated. If the goal is to increase the number/quality of jobs domestically, this is doing, and will continue to do far more than punitive tarriffs. If you want to compete with foreign countries, make it easier for companies to stay and do business in the country in the first place. I don’t buy the argument that the purpose of the tarrifs is to negotiate for freer trade. To me it’s protectionism pure and simple. Trump has done many good things but his insistence that he’s never treated fairly and his incessant whining about it, is his Achilles heel, and it’s rubbed off on a good many of his devotees.

  6. Trump’s Trade War Is Harming the Craft Booze Business?and Dragging Down the Rest of the Economy in the Process

    Yes the just released jobs report reinforces that headline. Jobs report for December 2018 predicted 178,000 new jobs and the results is 312,000. Twice the number the economists were expecting.
    Now what is hurting the economy is the people who keep reporting that Trump is hurting the economy with his this or that or something else. Yes there are going to be some bumpy time during the negotiations but as the stock market shows with its 700 plus gain that the investors see a brighter future than the nay sayers.

    1. Hey–you forgot to note that the jobs for November and October were revised upwards–a clear sign that the economy is in the crapper.

      I’m starting to think that ALL the volatility we’re seeing in the market is the result of the endless cry of ‘wolf’ we’re hearing from the media.

  7. The domestic bourbon market is $3.8 billion and growing at 6% a year.

    And we should care about miniscule boutique shops whining about 18 month old tariffs?

    Regardless, from what ive seen in europe, they pawn off the crap products as “fancy american bourbon”.
    Just like the “fancy grade a steaks from nebraska” are worse than what any american can buy out of their corner grocer’s discount bin.

    1. If elasticity of demand is that bad then I’d say that says they really aren’t all that ’boutique.’

      But that would give Suderman a sad.

  8. I like how this article implies there were no tariffs prior to trump. All new European tariffs are the direct result of trump, but trump’s tariffs were done in isolation and not due to previous foreign tariffs creating trade imbalances. Basically you have to believe prior to trump all trade was on a level playing field to buy this article.

  9. I essentially started three weeks past and that i makes $385 benefit $135 to $a hundred and fifty consistently simply by working at the internet from domestic. I made ina long term! “a great deal obliged to you for giving American explicit this remarkable opportunity to earn more money from domestic. This in addition coins has adjusted my lifestyles in such quite a few manners by which, supply you!”. go to this website online domestic media tech tab for extra element thank you……

    http://www.geosalary.com

  10. I love articles that come out and try to convince people of the desired narrative in the face of tremendous amounts of contrary evidence. Basically, “I know, I’ll write an article about how Trump is hurting the economy at the same time that economic reports show that the economy is rocking it in order to try and convince people that Trump is bad.”

  11. I thought the Boeme dude was supposed to write all the anecdotal articles about companies made worse off by tariffs in the booming Trump economy.

Please to post comments

Comments are closed.