Kentucky business owners discussed the impact tariffs could have during a recent federal issues summit in Lexington.
The federal issues summit brought Kentucky leaders together to discuss how changes in policy could affect local business. It was hosted by the Kentucky Chamber of Commerce.
The state’s soybean farms were among the discussed industries. China is the number one importer of soybeans, and a trade war could hurt sales. More than half of soybeans grown in the U.S. are exported, and more than half of those exports go to China.
Caleb Ragland is the President of the American Soybean Association. He said at the event that comes as inflation has already hit the industry.
“Costs have inflated a lot, and our commodity price is down about 40% in the last three years. So we're looking at higher cost and lower sales price for our product. And that is a very bad combination when you add a trade war to it,” Ragland said.
Ragland says they could see a sharp decline in exports if a trade deal isn’t negotiated by next year’s shipping season in February.
The state’s bourbon industry was also discussed. Kentucky makes 95% of the world’s bourbon whiskey, and exports could be impacted by a trade war. Some Canadian provinces have removed Kentucky bourbon from store shelves.
Jack Mazurak is the director of government affairs for the Kentucky Distillers Association. He said a trade war could cause people to cut back on luxuries like high-end spirits.
“If people are not feeling that the economy is supportive of them, or they're not getting ahead, are they going to buy a $60 or $100 bottle of bourbon, which is not a grocery, which is not a staple. And that can ripple through to tourism,” Mazurak said.
Mazurak also said Gen Z isn’t drinking as often, and the rise of THC beverages could impact bourbon’s place in the market. The association is talking with their fellow whisky distillers in Scotland and Ireland on how to deal with these changes, and to maintain an open dialogue.
