Kathryn Rampel (2:44)

So to be clear, the bourbon industry does have these boom bust cycles pretty regularly in part because they have to guess years in advance what demand is going to be. Right? I think you have to for it to be legally called bourbon. I think it needs to have been barrel aged for at least two years, but often it's longer than that so they can get stuff wrong. It's hard. However, the, the chances of getting things wrong this year were really high because of Trump's tariffs. Because Trump has ticked off basically all of our trading partners and as a result they are hitting us where it hurts. Either they are counter tariffing us as Canada did, or people are just so mad at the United States that they stopped buying US made booze and US made other things too. And so if you look at the data, if you look at data from like the Distilled Spirits Council, you can see that there are huge declines in purchases of US Spirits in general, not just bourbon. In Canada, for example, I think I had the numbers in front of me, I think it was like 80% decline and that's in Canada. But in other other big markets, Japan, the EU, etc. Spirits purchases are also way down and they did not they this time around. Captor Tera US they did last time. But it's just like people want to.

Sam Stein (4:17)

Question though, because you like rightfully note that this is a calculation by beam at least just them for now, but maybe others about where the market's going to be in three or four years. Right. This is not saying oh like we just had terrible sales to can in the eu. We don't have the money to like keep this distillery open. This is them making a determination that the market's not going to actually get better.

Kathryn Rampel (4:41)

Well, they may also have a lot of inventory on hand. Right. Because the bourbon stays good for a while, one hopes. So it may be the case. I don't know. Not if we let Sam, I'm sure. How many years I guess. But yeah, so, so it may be that they're clearing out inventory, but yeah, it does portend sort of a poor forecast for what they expect the market to be like in the next few years. And Trump is going to be around for a few more years and probably will have continued to enrage our trading partners around the world even long after he is gone. I I think that as we have discussed many times over at the Bulwark, the damage of Trump administration policies and luster and everything else will long outlast this administration.

Sam Stein (5:32)

All right, Sonny, you consume a fair amount of bourbon.

Sunny Bunch (5:34)

I have my share.

Sam Stein (5:37)

What do you make of this?

Sunny Bunch (5:38)

No, I, well, it's, it's really interesting having watched the, the, the various bourbon boom and bust cycles over the years kind of play out because they happen in weird ways. Like a few years back, a, you know, shortly after, I like got seriously into drinking. You know, because in college you just drink, you just drink Jim Beam and that's like, that's fine. And then you get a little, you get a little more serious into it. You get, you get into, you know, the different, different get to the makers level taste.

Sam Stein (6:03)

And then you get a little bit.

Sunny Bunch (6:04)

Beyond makers, you get beyond Creek. You know, you start getting into the Willets and whatever, the, the Buffalo Trace Heritage labels, etc, and it, it is, it's interesting to watch this play out because there was a big, there was a big boom when China really got into spirits. So China gets into spirits, prices go way up. Stuff gets harder to find. For a while there was a, there was a, there was a very controversial story a few years back. Jim Beam was going to change their formula to decrease the proof so they could stretch the bottles further to meet the demand in China. This was a very big thing. And then that, that ended up getting kind of walked back and now obviously it is not as big a problem. And so there are, there are other, there are other factors in play here. There's a, there's a health factor in play right now. Right? Like people are drinking less just in general because they're, you know, there, there's zampic and everything else. Like there, there's, there is a decrease in demand. There's a decrease in China. The Chinese economy was hit very hard. I think their imports of foreign, of American Whiskey was down 6 or 7% over the last couple of years. So, like, they're importing less. But the, but the, the Canada thing is crazy. I just want to read, I want to read the line from the press release. Catherine kind of alluded to it here, but it was, it was crazy. Let's see. Swonger said. So the, the Distilled Spirits Council of the United States CEO and President Chris Swonger said, where is this shift more pronounced than in Canada where US spirits exports plummeted 85%, falling below $10 million in 2Q20. That's 25 85%. That's like an extinction level event. Now of course Canada, not as big as the United States and you know, whatever, but the, the, the anger, the anger and the frustration with the Canadians to. Against America right now is something else. And this hurts. Look, this doesn't hurt me. It's actually all of this benefits me, the bourbon consumer, because there's more.

Kathryn Rampel (8:04)

Until the booze companies go out of business.

Sunny Bunch (8:07)

Until they go. Yeah, until they go out of business. But no, but like it's, it's the stuff in America. I have already noticed this is a little bit cheaper than it has been. American made bourbons have, are easier to access and, and slightly cheaper than they have been in recent months. So this is fine for me, but it sucks for, it sucks for Kentuckians, it sucks for the people in Kentucky. I wrote like in, in, in 2016, 63% of Kentuckians voted for Donald Trump. In 2020, it's 62%. In 2024, it's 64. The Jim Beam distillery employs a thousand people. A lot of those people are going to be idled. And this is entirely because of the ins, like again, go trade war against Canada. Of all of the bizarre economic things that have happened over the last 12 to 18 months, that was by far the weirdest. Like, like trying to pick a fight with Canada made no sense whatsoever. And we're seeing, we're seeing the fruits of it in this, in this very specific but like again very important industry to, to a, an entire state of the union.

Kathryn Rampel (9:15)

And by the way, I should mention that it's not only counter tariffs in Canada. There are some provinces that just like banned the sale. They have state owned alcohol stores.

Sam Stein (9:26)

Yes.

Kathryn Rampel (9:27)

And they just took all of the U.S. booze.

Sam Stein (9:29)

Well, that was what I was going to bring up because we actually. One of the editors at the Bulwark, Martin Wendell Jones, lives outside of Toronto. He came on and he and I talked about this. This actually got me a little bit in trouble with our community because I was laughing at the absurdity of it all. But they thought I was laughing at Canada. I wasn't I. Canada. But he was talking about the, the liquor stores in particular where you would go in and, and all the American spirits were off the shelves, just gone. You couldn't get it. And then he told me about this thing called Maple washing. Have you guys heard of maple washing?

Kathryn Rampel (10:00)

Yes.

Sam Stein (10:00)

So Maple Watching is just basically disguising an American product and pretending it's made in Canada in order to try to sell it. So this was a thing. And we were up in Toronto for the live show. You know, people were mentioning this. They just sheer anger bordering on disgust, but also sort of confusion over why the United States government had gone to trade war with Canada. Did not make any sense whatsoever. Actually leads me to a question for you, Catherine though, because one of the things I've been curious about is, you know, we're picking all these fights with different nations. I had presumed that one way that we would have seen pushback is by those nations kind of banding together to form their own collectives. Right. You know, their own trade agreements. And I think we have sporadically, but I guess maybe I'm ill informed, but I'm surprised we haven't seen more of that.

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Sam Stein (12:06)

More.

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Kathryn Rampel (12:20)

Actually, there's been a lot of activity on that front and it's been going on all year in some cases pretty astonishing. Some of the what are some alliances so so like Japan, Korea and China, South Korea and China all got together earlier this Year, I think for the first time in like five years or something to have economic talks. And if you know anything about the history of those three countries, they do not like each other particularly well. And Trump has managed to bring them together. So I think that's just one example. But you see a fair number of other cases where we are uniting the world, we're just uniting them against us because they're pissed off about our trade policies, about the other erratic things that our president and his administration has done. You know, not only on trade, but threatening to invade Canada and sees it as, As a, the 51st state threatening to invade Greenland. Like, there's a lot of other reasons that he's pushing other countries closer to each other and against us, but trade is certainly one of them and it's something that's easier for them to remedy. Right. That if they're mad that, like, they think that their own exporters are being unfairly treated in the United States, they're going to seek customers elsewhere. They're going to seek customers in China. You know, like, part of the reason why Barack Obama really sold the Trans Pacific Partnership, I'm old enough to remember that back when he was president, the whole idea was to have a coalition of countries kind of gang up against China on trade. It was going to be us and host of other countries around the Pacific, Pacific Rim, and that the idea was that we were going to make it easier to trade amongst ourselves and set the rules of the road on trade in a way that would eventually, hopefully pressure China to, to reform its own behavior. And instead, of course, Democrats were against it when other, you know, Democrats in Congress were against it. When Barack Obama was president, on Trump's first day in office, in his first term, he tore up the agreement, and then the remaining countries signed their own agreement. And, and it helped them. Right. It hurt us. We're seeing different iterations of that today.

Sam Stein (14:49)

So, Sunny, I guess I'll ask you sort of to get in the mind of a Republican politician at this point. Right. You've spent your career touting the importance of free trade, lower tariffs, President comes in, jacks up tariffs, starts trade wars, domestic industry struggles in light of that. And, yeah, maybe the consumer's getting a little bit cheaper. Domestic bourbon. There's only domestic bourbon. Little cheaper bourbon. But if you're a Republican politician, if you're Rand Paul in Kentucky, like, what do you, what do you do here? I mean, do you just rail? I don't. And why not?

Sunny Bunch (15:23)

Yeah, I don't know. I mean, it's A great question. And it's interesting. The politics of it are interesting too, because the, you know, one of the reasons Jim Beam is slowing down the sales of this is because in Kentucky, one of the things that they tax is aging barrels of whiskey. So if you have barrels just kind of piling up, you end up spending more in taxes. I think the, the numbers I saw that Kentucky distillers were paying 27% more in taxes this year. So I don't. Maybe you look for relief there. But like I, if, you know, there's. The problem with trying to formulate a rational response to what Trump has done here is, is that there is no rational response because he has, as you said, threatened, threatened to make Canada the 51st state. Like, how do you respond to that in any, in any rational way? I just want one quick instant correction from me. I mentioned the lowering of the proof. It wasn't Jim Beam, it was Maker's Mark. I knew as soon as I said that it was wrong. But same basic idea here.

Sam Stein (16:29)

Yeah, but you just protected your cred, which was what really mattered.

Sunny Bunch (16:32)

I was going to get yelled at. I probably will still get yelled at. It's fine. But the, but no, it's. I like, I don't. How do. What does. What is ram. I mean, look rampant.

Sam Stein (16:43)

Rand will do Rand things, but a random Kentucky cent Republican. Right. It's like I'd be.

Sunny Bunch (16:48)

Say what you will about Rand Paul and I have a lot of issues with a lot of his stances, particularly on foreign policy. But like he will just say what he thinks and he, and it's a, it is a conservative, a conservative enough state that he can get away with that. He has his, he has his constituency and I think he can do that. And that's good. I think it would be.

Sam Stein (17:07)

There is a Senate Republican primary to replace Mitch McConnell right now. There's a Senate Republican primary placement to call right now. And you're kind of in a spot where you can't criticize Dear Leader for these trade wars because you need him to support you. It's a weird spot.

Kathryn Rampel (17:21)

Well, if you look at the, the counter tariffs that were put in place in Trump's first term, they deliberately targeted the districts that would be politically sensitive. So they deliberately targeted bourbon, for example, as well as motorcycles, because Harley Davidson has a manufacturing plant, I guess. I think it was in Paul Ryan's district back in the day. So this was a strategic choice by other countries back then. This time around, you know, they've taken slightly different responses that they're they're not necessarily all counter terror. They're like, you know, as we've discussed, they've been teaming up with other trading partners and just trying to cut out the United States or at least displace some of the lost business there. And I think that they're just hoping that the pain will be so bad here in the United States that Trump will eventually have to roll back his tariffs. And he has, to some extent. And then we have. What we haven't gotten into is the fact that, like, Supreme Court is probably. Yeah, the Supreme Court is probably going to strike down most of his tariffs. But that's the point.

Sam Stein (18:29)

So. But wait, to your point, though, it's like, let's say the court does strike it down. It doesn't reignite any sort of global goodwill towards Trump.

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Sam Stein (18:39)

Right. Like, Canadians are not going to suddenly be like, all right, well, we'll restock those shelves. We're going to take off the fake.

Kathryn Rampel (18:45)

Thank you. Robert's Court. Yeah, no, of course not.

Sam Stein (18:48)

Change things.

Kathryn Rampel (18:48)

Yeah, of course not. And the Trump administration, if they were smart, they would take the win. And as I've written before, they would take the win when the Supreme Court presume is likely to strike down most of his tariffs. And then the money is going to go, you know, all these companies in the United States are going to get a rebate and it would have a nice little shot in the arm for the economy because it'd be basically a stimulus check because of these tariffs coming back. And maybe companies would be able to plan again in terms of what they buy and hire and invest in and all of that stuff. And maybe we can start to repair some of those relationships that have frayed with these other countries. But none of that stuff is going to happen. Most likely what's going to happen instead is that the Trump administration is going to try to cobble together other tariff authorities to reconstruct all of the tariffs that have been in place. And those, you know, those are on more solid legal footing. They'll take some time, but in the meantime, we are continuing to piss off everyone, domestically and internationally.

Sam Stein (19:47)

Yeah. All right. Well, here's to you guys. Appreciate the talk. I'm not gonna drink this. It's still pretty early.

Kathryn Rampel (19:55)

I won't drink you. I mean, somebody out there might.

Sunny Bunch (19:57)

That's fine. Just. There you go.

Kathryn Rampel (20:00)

There you go.

Sam Stein (20:01)

Sam, Kathryn Rampel, Sonny Bunch, thank you both. Thank you guys for watching. Please subscribe to the feed. Like this stuff. Algorithm is king. Talk to you soon.

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Sunny Bunch (20:40)

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Sam Stein (20:44)

This is a breed reveal.

Lemonade Advertiser (20:45)

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Sam Stein (20:48)

Of the puppy they're rescuing, so they.

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Sunny Bunch (20:59)

Here we go.

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I don't know.

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Sunny Bunch (21:07)

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Sam Stein (21:10)

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