Trump Tariffs, Spirits and What ‘Made in America’ Really Means

To make its American single malt, Virginia Distillery follows all the regulations: namely, the grain is mashed, distilled and matured in the U.S.

But—like many made-in-the-USA spirits—the all-American single malt involves a global supply chain. In fact, even the most local craft spirits incorporate ingredients, packaging or production parts sourced outside of U.S. borders.

With tariffs (and potential retaliation on U.S. products) back in the news, it raises the question: What is an American spirit, anyway?

The Global Supply Chain

For starters, it’s not a product made in a vacuum, the pros say.

“Not everything can be hyper local,” says Virginia Distillery CEO Gareth Moore. “We live in a global economy. Things come from everywhere.”

For example, while the distillery uses U.S. grain (although that’s not required for American single malts), that grain is milled using U.K. equipment; fermented with yeast sourced from both the U.S. and France; and distilled in a Scottish still that’s cooled using a chiller system from China. The boiler system is made in the U.S.—“there’s a big American flag on the side,” Moore says—but parts of the unit that handle wastewater thrown off from distillation come from Canada.

Then there’s the aging process. Virginia Distillery uses bourbon casks from Kentucky, but also Sherry casks from Spain and additional wine casks from throughout Europe used to cask-finish the whiskey.  Once aged, the resulting American single malt is packaged in bottles sourced from South America, affixed with a small medallion from France and protected in a tin from China. The bottle stoppers and labels are made in the Midwest and New York, respectively.

This global supply-chain approach is not unique to American spirits, Moore notes. For example, Scotch whisky, famed for emphasizing its provenance, is often made with grain grown in Ukraine. 

So what is an American spirit? 

“Fundamentally, it comes down to where you’re getting your ingredients and what you’re doing with techniques and tradition,” Moore says. “We make something in a Scottish style and tilted it toward an American taste.” 

Further, Moore argues that making the whiskey in a region with hot summers and cold winters adds a sense of place, separating it from malt-making counterparts in Scotland or Japan. “You have the climate making the product what it is,” he says. 

‘It’s Where the Juice Is Produced’

That’s how Will Hensler, the chief operating officer of Florida’s St. Augustine Distillery defines a made-in-the-U.S.A. spirit.

According to Hensler, even if a spirit is made with raw ingredients sourced elsewhere (Canadian grains, Caribbean sugar cane, Mexican agave) and fermented with non-native yeast (Lallemand, one of the biggest producers of yeast, is headquartered in Canada), producing the distillate (“juice,” in industry parlance) in the U.S. is what makes it an American spirit.

“Where the juice is produced is the country of origin,” Hensler states. “Lots of places use sourced materials. To me, it comes down to where the bulk of the production takes place.”

In terms of supply chain for St. Augustine, the distillery uses grain from the U.S. for its bourbon and Florida-sourced molasses for cane spirit, the base of its gin. But that’s where it gets trickier: Juniper, the key botanical used to make gin, comes from Macedonia and elsewhere, as does the line-up of “fully global” botanicals, which hail from “10 unique regions,” he notes. Bottles are sourced from Canada, bottle caps from Argentina, labels from North Carolina. 

“Packaging and non-grain materials are the parts we struggle with domestically,” Hensler admits. Defining a U.S. spirit as wholly made from and packaged in U.S.-sourced materials would strain St Augustine’s business, he adds. “It’s a tough road to go down and not harm small companies.” 

Flexibility in sourcing helps keep costs in check and ensures availability of materials. “When we started the business, everything was local, as much as possible,” Hensler says. But that shifted due to escalating prices and scarce resources. “Can you get the materials at the price point you need to be a sustainable business? That gets harder and harder each year.”