Trade Retaliation and the U.S. Distilled Spirits Industry

We examine why distilled spirits are consistently targeted in retaliatory trade tariffs. Analyzing USDA export data, we show the U.S. distilled alcohol industry, particularly whiskey, is geographically concentrated in politically sensitive states like Tennessee and Kentucky. Tariffs imposed by the EU in 2018 led to sharp declines in whiskey exports, disproportionately affecting these specialized regions. We argue this strategic targeting maximizes political pressure while minimizing domestic economic harm