Over the years the bourbon industry has seen its fair share of ebbs and flows, this past year stands out as a strong pullback with secondary prices currently retreating just north of ten percent since the start of the year according to the Bourboneur Secondary Market Index. With the upcoming shift of the political landscape, bourbon enthusiasts may find themselves wondering about the effects that leadership changes at the top will have on the market – especially those who have enjoyed the pullback we’ve seen tied to the run up of inflation. To that end, we sought to answer today whether a Trump presidency is beneficial – or – detrimental to bourbon prices on the secondary market. The answer is multifaceted, but this post will delve into the various elements at play, highlighting the nuanced relationship between politics and the secondary bourbon market.
You’d have to have been living with the Amish these past number of months to not have heard talk of Trump’s planned imposition of new aggressive tariff policies as a strategy when he takes office to protect American industries and jobs.
During Trumps first term in office which began what feels like an eon ago in 2017, tariffs were a hallmark of his economic policy, so we have to assume that the same will play out as we move into 2025. During that era, the European Union imposed a 25 percent tariff on bourbon in retaliation for our tariffs which Trump imposed on steel and aluminum. That tariff on bourbon was suspended in January 2022 (and then extended again this past year through March of 2025). Why does that matter? The EU is a significant customer of the bourbon industry with exports last year equating to $705 million, nearly double that of 2021 as Trump was exiting office…Europeans have clearly caught the bourbon bug as well it seems. To provide some context, worldwide bourbon sales last year equated to $5.1 billion, so the EU portion of those sales is roughly 14 percent – not a small number should we once again see a tit for tat on the tariff front if the suspension were lifted.
Despite the challenges we just discussed relating to international trade, the domestic market for bourbon has found itself to be quite durable. The American bourbon renaissance, which began in the early 2000s, has continued to gain momentum. A new generation of consumers, driven by a desire for premium and craft products, has embraced bourbon with a passion…the lines outside any given liquor store for a “drop” are an attestation to this.
Additionally, craft distilleries have proliferated across the United States, each offering unique and often innovative expressions of bourbon – albeit many initially sourcing from MGP (insert heavy sigh here). This domestic boom had previously helped mitigate some of the losses from decreased international sales. However, this growth has also introduced its own complexities. Increased demand within the U.S. has led to supply shortages, driving up prices. Established brands such as Buffalo Trace for example have had to balance maintaining their traditional quality with scaling production to meet growing demand. With billions of dollars invested in all variety of distillery small and large, the hope seems to be to meet that demand head on...albeit a decade or more out into the future which isn’t terribly helpful today as we think about the four years ahead in the second MAGA wave.
Trump's broader economic policies have also influenced the bourbon industry. The Tax Cuts and Jobs Act of 2017 reduced the federal excise tax on distilled spirits, which provided some relief to distilleries. This reduction in taxes was particularly beneficial for smaller producers, allowing them to reinvest savings into expanding operations and innovating new products. However, the benefits were not uniformly felt across the industry. Larger producers, with more significant resources, often found it easier to capitalize on these tax breaks compared to their smaller counterparts.
On the flip side, the overall economic volatility during Trump's presidency, marked by trade wars and fluctuating market conditions, created an environment of uncertainty. For a product like bourbon, which requires years of aging, long-term planning is essential. Distilleries had to navigate these uncertain waters carefully, balancing investment in future production with the need to remain financially stable in the short term.
When I think about the future of bourbon prices under a potential Trump presidency, several scenarios emerge. If Trump's policies continue to favor protectionist measures, we can expect ongoing challenges in international markets. However, the resilience of the domestic market, coupled with potential tax incentives, could continue to support the industry's growth. It’s likely that pricing will continue to ebb for the short term as change doesn’t happen overnight and the trajectory that we’re on suggests there is still meat on the bone to be cleaved in the secondary pricing game.
If we were to see international tariff’s being imposed come March, that would equate to potentially greater domestic supply as we’d see reduced demand given the higher price point and with reduced demand comes reduced exports. With a potential buildup of inventory domestically from depressed international sales, coupled with new sources of bourbon coming online through ongoing distillery expansions, there could be a substantive supply surplus…and all things held constant that would suggest lower pricing. That pricing retreat is probably not synonymous with all bourbon, especially for older age expressions which many are chasing that still have yet to see capacity catch up.
That said, as we look behind the immediate short term economic disparity most American’s find themselves in, and a new generation of drinkers finding their way to bourbon, coupled with the likely economic tailwinds that the average American could see depending on the specific policies implemented in a Trump 2.0 White House, we could very easily find ourselves in a rising price environment. As consumers find more disposable income and the growth engine of job creation kicks into gear a strong economy likely means higher prices for bourbon – especially on the secondary market.
In conclusion, the impact of a Trump presidency on bourbon prices is a complex interplay of trade policies, domestic market dynamics, and economic reforms. While there are clear challenges, particularly in the realm of international trade, the domestic bourbon market remains robust. The industry's ability to adapt to changing conditions, coupled with a growing appreciation for bourbon's unique qualities, suggests a resilient future. Whether Trump's policies will ultimately be viewed as a boon or a burden to secondary bourbon prices remains to be seen, but one thing is certain: bourbon will endure.
Data matters and having up-to-date and reliable information to make informed decisions about buying, selling or trading coveted bottles of brownwater is critical. The secondary market doesn’t stand still and neither do we in cataloguing and providing the web’s most accurate, reliable and up-to-date pricing around. As new bottles hit the market, their pricing changes daily…finding a ceiling, and eventually a floor. The market shifts up and down, commensurate with the economy – with the bourbon secondary market down over 10 percent year-to-date. If you’re looking for a resource that’s based on real data grounded in actual sales on the secondary market, is updated regularly, and has values for over 5,500 bottles and growing at your fingertips, you need to look no further than the Bourboneur App for iOS and Android. The app does require a paid subscription, only $3 per month or $25 a year, which easily pays for itself!
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