Your Potential Whisky Deal: Jim Beam Glut from Trump's Tariffs Could Cut Prices, but Hurts 1,500

Jim Beam is shutting whisky production at its historic Kentucky distillery for all of 2026. The move puts nearly 1,500 jobs at risk as a glut caused by the trade war floods America's whisky heartland. But the bourbon oversupply that prompted the closure could be good news for drinkers seeking bargains.

The shutdown marks a turbulent year for US bourbon producers. After President Trump's tariffs triggered a Canadian consumer boycott in March, US spirits exports collapsed by 85% through the summer, according to the industry group, the Distilled Spirits Council of the United States.

Even after Canada lifted its retaliatory tariff in September, the boycott persisted—exports remained down more than 60% through October, reports from local sources indicate. As a result, Kentucky is now flooded with bourbon. Industry insiders report bulk whisky prices have fallen as much as a decade's worth of gains.

To understand how the industry reached this point, it's helpful to trace the cascade of events caused by the trade war.

How Trump's Tariffs Created a Bourbon Crisis

President Trump's tariffs on Canadian goods prompted swift retaliation. Canada imposed a 25% tariff on US spirits in March, according to Southern Ag Today.

Canada had been the second-largest market for American whisky, importing more than $250 million annually. Exports plummeted from 1.4 million proof litres in February to just 200,000 in April—a decline of 85% in two months.

Canada lifted the tariffs in September, but the damage was done. Canadian consumers continued to shun American spirits, and exports remained more than 60% below previous levels through October, reports the Lexington Herald-Leader.

This decline in exports left Kentucky's bourbon industry drowning in unsold stock. Industry-wide production fell by 28% through August—the lowest since 2018.

This oversupply is already reshaping the economics of American whisky and creating opportunities for bargain hunters.

Bulk Prices Drop as Barrels Pile Up

At the August International Bulk Wine and Spirits Show, the mood among whisky sellers was sombre. Thomas Neiheisel, director of bulk sales for Pernod Ricard, told Wine-Searcher that aged bourbon had become a buyer's market. 'Some of the prices have been rolled back five or 10 years,' he said.

The glut has flooded the market with aged bourbon desperate for buyers. Eight- to 12-year-old bourbon—once premium-priced—now often appears at steep discounts. The oversupply has been partly driven by the rise of ready-to-drink cocktails, which have taken market share.

Industry experts expect this glut to lead to promotional discounts and bundle deals at retail in the coming months.

When the European Union lifted tariffs on American whisky in 2022, bourbon prices fell, and exports surged by nearly 60%, trade analysts note.

But the oversupply comes with a human cost.

1,500 Jobs in Limbo as Distillery Goes Dark

The James B. Beam Distilling Co. employs nearly 1,500 people in Kentucky. Its Clermont distillery is the company's flagship. When production halts on 1 January, the site will stay silent through 2026. The company says it is 'assessing how best to utilise' the workforce during the shutdown. Union discussions are ongoing, but no mass layoffs have been announced.

Bottling and warehousing will continue, as will the visitor centre, which attracts more than 100,000 visitors annually. The parent company, Suntory, has invested around $540 million in Kentucky.

Jim Beam is not alone in feeling the pressure. Brown-Forman, producer of Jack Daniel's, announced production pauses and layoffs earlier this year.

The combination of oversupply and changing drinking habits suggests the industry's difficulties are far from over.

The Long Hangover from a Year-Long Trade War

The trade war is not the industry's only challenge. A Gallup poll published in August found that 53% of Americans now consider moderate drinking unhealthy—up from 28% in 2015. Younger adults are leading this shift, with doubts about alcohol's health effects.

Meanwhile, Canada increased oak cask imports by 6% during the trade dispute—a sign of growing domestic distilling capacity. This investment suggests the market loss could be permanent. If oversupply persists into 2026, retail discounts on bourbon are likely to accelerate.

Good news for drinkers. Bad news for distilleries.

For the 1,500 workers at Clermont, the question is whether jobs will return in 2027. With a generation of consumers drinking less overall, future demand remains uncertain.