Foreign tariffs made U.S. whiskey cheaper... depending on where you live
A new study finds that one side effect of Trump-era trade wars has been cheaper whiskey in much of the United States. But if you live in whiskey hubs Kentucky or Tennessee, your prices actually went up.
In 2018, the Trump administration imposed tariffs on U.S. whiskey exports, sparking a trade war with major trading partners. In response, Mexico, the EU, Canada and China imposed tariffs on U.S. whiskey, reducing demand for domestic production. This led U.S. whiskey producers to decrease prices to boost domestic sales. However, the impact on consumers varied significantly by location.
In most states, whiskey prices either stayed the same or rose slightly. But in the whiskey hubs of Kentucky and Tennessee, prices actually increased. These states produce the majority of whiskey consumed in the U.S., and consumers were willing to pay a premium for locally made products. Aging constraints prevented producers from quickly adjusting supply in response to lower exports.
Instead, they adopted a dynamic pricing model, favoring price adjustments over production changes. This study highlights how political tensions and trade disputes can disrupt domestic industries, and how the effects on consumers can differ widely across regions.
Written by urgent.news from Phys.org's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
