Politics & Government

With bourbon on the line in Trump's trade war, how do Barr, McGrath respond?

Amy McGrath will challenge Rep. Andy Barr.
Amy McGrath will challenge Rep. Andy Barr.

When U.S. Rep. Andy Barr, R-Lexington first won his seat in 2012, he made heavy use of a signature industry of the region: coal.

Now, as Barr fends off his strongest Democratic challenger yet, another signature industry in the district is under threat: bourbon.

After President Donald Trump imposed tariffs on foreign aluminum and steel, a bevy of countries responded with their own tariffs. On the list of exports being taxed: American whiskey.

"It will absolutely hurt us," said Amir Peay, the owner of the James E. Pepper distillery in Lexington. "This is something I’ve been working on for years. And now we’re looking at a 25 percent tariff."

A trade war, particularly one that hurts one of the Sixth Congressional District's signature industries, could present a political challenge for incumbent Barr as he attempts to fend off a challenge from former fighter pilot Amy McGrath, a Democratic candidate who has drawn national attention to the race.

Barr said he set up a meeting with the Kentucky Distillers Association and Vice President Mike Pence when Pence visited Woodford County in March. He said he had his own conversation about it with Pence on their way back to Washington. He said he weighed in with the House Ways and Means Committee and with members of President Donald Trump's cabinet.

"We've voiced our concerns," Barr said.

But it hasn't been enough to sway the administration. Trump's imposed tariffs were quickly met with retaliatory measures from other nations. Mexico imposed a 25 percent tariff on U.S. whiskey. Canada has threatened a 10 percent tariff on U.S. whiskey that could go into effect July 1. The European Union could impose a tariff as early as Wednesday.

“It’s nice that he expresses his concern, but he needs to do more than that,” McGrath said.

Republicans, including Barr, have been reluctant to take up legislation to counter Trump. Instead, Barr says he's hoping that the tariffs are a negotiation tactic and that he can get a deal with some of the country's biggest trading partners before most of the tariffs go into effect.

"It’s kind of one of these things we appreciate because the administration is trying to get reciprocal trade," Barr said. "At the same time, I’ve got to fight for my bourbon industry and I’m doing it.”

McGrath says she doesn't think the tariffs will help Kentuckians. When the University of Chicago asked a panel of economists if imposing steel and aluminum tariffs will improve Americans' welfare, not a single one said it would. Even an analysis by the White House's own Council of Economic Advisers has found that the tariff's will hurt economic growth.

“The tariffs make no sense, that’s the bottom line," McGrath said. "The tariffs are evidence of the wider agenda that hurts the average American.”

Like coal, bourbon has become a signature industry in the district in recent years, drawing tourism to the region as the bourbon boom has spread across the country. That could make the issue difficult for Barr as he walks the fine line between embracing a president who won the district by 16 points and denouncing the result of the tough on trade talk that helped Trump get elected.

“Barr won his election in part because of the wide influence of coal politics," said Stephen Voss, a political science professor at the University of Kentucky. "Coal had a symbolic importance that appeared to influence the vote of people who weren’t in the industry.”

It isn't clear exactly how much the tariffs will hurt the bourbon industry. Some of the larger distilleries, like Brown-Forman, are stockpiling their bourbon in Europe in anticipation of the tariffs. Others don't really export their product.

That's not an option for the James E. Pepper Distillery.

“For us smaller guys, this is exponentially more impactful in a negative way,” Peay said.

Instead, he's left hoping that politicians can come up with a solution.

“What I wish is that they would figure out a way to eliminate these tariffs,” Peay said.

Herald-Leader reporter Janet Patton contributed reporting to this story.

People shuffle for parking spots Friday evening around the Pepper Campus in the Distillery District.

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