Tom Eblen

Trump trade war threatens Kentucky bourbon. Where are our GOP senators, congressmen?

Senate Majority leader Mitch McConnell delivers a speech at the Willard Hotel in Washington, DC, at a bourbon tasting hosted by the Henry Clay Center for Statesmanship in February.
Senate Majority leader Mitch McConnell delivers a speech at the Willard Hotel in Washington, DC, at a bourbon tasting hosted by the Henry Clay Center for Statesmanship in February. McClatchy

President Donald Trump’s decision to launch a trade war against some of America’s closest allies now threatens Kentucky’s bourbon industry and much more. But don’t just blame the fool in the White House; blame the spineless Kentucky Republicans in Congress who enable him.

Amid dissension within his own trade team, Trump on Thursday announced plans to slap tariffs of 25 percent on steel and 10 percent on aluminum imported from Canada, Mexico and the European Union.

The administration knew those trading partners have threatened to retaliate with tariffs on American goods. Kentucky bourbon is a prime target because it comes from the home state of Senate Majority Leader Mitch McConnell.

“The leader has been clear that a trade war is not in the best interest of Kentucky’s economy and that there are better ways to address trade imbalances,” McConnell spokeswoman Stephanie Penn said, adding that he “will continue to raise his concerns directly with the president and his team.”

You can almost hear Trump laughing at McConnell in the background.

And where are other members of Kentucky’s GOP delegation in this fight? The same place they always are: Afraid to stand up to a dangerously unfit president because their once-honorable party has become a cult of Trump followers.

The irony here is that the GOP has always believed in free trade. Now, it’s a party that believes in whatever Trump tweets on any given day.

Nowhere is Trump’s ignorance of economics more on display than in this “America-first” trade war. Any economics student can tell you it is foolish to slap tariffs on imported raw materials. That just pushes up their cost and hurts sales of more valuable, domestically produced finished goods made from them.

Trump’s protectionism may help a few steel and aluminum manufacturers, including some in Kentucky, but it will hurt sales of finished goods both here and abroad and raise their prices for American consumers. Want a Toyota Camry made in Georgetown? Be prepared to pay more for it.

Bourbon has become a high-profile, growing industry bringing international fame to Kentucky. The Kentucky Distillers Association says the industry is now worth $8.5 billion to the state, supporting 17,500 jobs with an annual payroll of $800 million. Those distilled spirits generated federal, state and local taxes totaling $825 million.

The European Union bought $154 million worth of bourbon last year, up from $128 million the year before. If Trump’s trade war continues, the 2018 figure will fall, costing some Kentucky workers their jobs.

“We remain hopeful that continued negotiations will avoid a costly trade war and protect our allies and partnerships around the world, which will continue to benefit spirits producers and consumers for years to come," Eric Gregory, president of the Kentucky Distillers’ Association, said in a statement Thursday.

IMG_090831BourbonTE057_8_1_J2DD6SE7_L378268401 (1).JPG
Barrels of bourbon, such as these aging barrels at Buffalo Trace in Frankfort, hit a tax-assessed value of $3 billion in Kentucky in 2017. The industry paid $23 million in taxes. Another 1.7 million barrels were filled last year. Tom Eblen teblen@herald-leader.com

It’s not just bourbon. Trump’s reckless trade policies could do Kentucky a lot of harm. A recent report from Moody’s Investment Services said that among all 50 states only Michigan is at more risk of harm from a Trump trade war than Kentucky.

International trade is a big part of our state’s economy, supporting one in five Kentucky jobs, many in fastest-growing sectors such as advanced manufacturing. Kentucky goods and services are exported to 195 countries.

The state’s leading exports aren’t bourbon and horses, by the way. They are aircraft engines, passenger vehicles and a lot of their parts and pieces. Think higher steel and aluminum prices won’t kill a lot of Kentucky jobs? Think again.

Canadian Prime Minister Justin Trudeau said he doesn’t want to be forced into a trade war with the Trump administration. “We have to believe that at some point their common sense will prevail,” he said.

Don’t hold your breath, Trudeau. Common sense is a concept Trump and his sycophants rejected long ago.

The James E. Pepper Distillery is now producing bourbon nearly 60 years after being abandoned.

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