It’s called – in not terribly elegant language – a semiquincentennial. On 4 July, the United States of America will celebrate the 250th anniversary of the signing of the Declaration of Independence. As good a time as any, then, to consider the current health (or lack of it) of the American whiskey category.

The founding fathers knew a bit about distilling. In 1797, the story goes, George Washington was persuaded by his farm manager, a Scot named James Anderson, to build a distillery on his Mount Vernon estate – a sideline to Washington’s milling operation. He’s said to have been dubious about the idea but within a few years the plant was the largest in the nation.

Distillers would kill for a slice of Washington’s success today. The sorry saga of the past few years – pandemic boom, over-production, fall-off in demand – is well enough known but a recent presentation given by Chris Swonger, the president and CEO of the Distilled Spirits Council of the United States (DISCUS), spells it out in painful detail.

Swonger was giving evidence before the United States Section 301 Committee, an inter-agency body investigating trade deficits under the auspices of the Office of the United States Trade Representative (USTR). (As an aside, he was keen to point out that the US trade deficit with other major spirits-producing countries was the result of “consumer choice, not … unfair trade barriers” because the US recognises GIs such as Scotch whisky, Irish whiskey, Cognac and Tequila. Whether the current administration will heed such common sense, however, is another matter).

DISCUS figures covering the US market for American whiskey are clear enough: going back to 2003, volumes have risen every year (barring a marginal decline after the global financial crash in 2009) until the peak of 2022, since when there have been three consecutive years of decline, with 2025 volumes 4% down versus 2022. Value increased every year over the same period – until declines in 2024 and 2025.

Total US domestic spirits sales fell 2% last year, the first such decline in decades and US spirits exports were down 4%. The reaction from businesses has been robust: US distilleries shed 3.5% of their total workforce in 2025, according to Bureau of Labor Statistics data quoted by Swonger, which equates to almost 1,000 jobs.

The declines in the domestic market, taken out of context, look insubstantial. But we’re talking about a total US spirits sector that increased its exports fivefold between 2000 and 2024; in the domestic market, sales of spirits recently overtook those of beer and wine. Put simply, everyone had further to fall.

The good times encouraged a belief that the growth trajectory could last for ever, persuading established players to increase production and spawning an apparently endless wave of new distillers across all 50 states. But, as production moved in one direction, consumption went the other way, with disastrous consequences.

By the beginning of 2025, Kentucky had more than 16 million barrels of Bourbon sitting in warehouses, an all-time high and more than three times the inventory held as recently as 2010. Between August 2024 and 2025, distillers slashed production by 28% to hit the lowest level of output (142m barrels) since 2018.

Production pauses and job losses, yes, but outright closures, too. In 2005, there were fewer than 100 distilleries operating in the US; by 2024, there were more than 2,300. The backlash since has been disproportionately suffered by smaller players, with the number of craft distilleries plummeting by 25% between August 2024 and August 2025.

There’s an obvious temptation to simply sit in the huge domestic market, rather than going to the cost and complication of developing overseas destinations

It’s a toxic mix made even more unpalatable by the global trade picture. But for the need for diplomacy, Swonger might have had some choice words to say to the committee about the chaotic policies of the second Trump administration. Exports to Canada down 63% in 2025 thanks to the spat between Washington DC and Ottawa and the removal of US products from shelves; retaliatory measures, both actual and threatened, from key trade partners.

The EU tariffs imposed on American whiskey between 2018 and 2021 led to a 20% slump in exports. But consumer demand was in a different place then and shipments bounced back to the tune of a 60% surge once the tariffs were suspended.

Even the mere prospect of tariffs affects business: the EU has repeatedly suspended planned retaliatory tariffs on US spirits (currently until August 2026) but Swonger blames the sheer uncertainty for a 3% decline in US spirits exports to the EU.

Arguably the chief conundrum facing the industry here is the tension between domestic and export priorities. It’s a little bit similar to the situation with California wine – there’s an obvious temptation to simply sit in the huge domestic market, rather than going to the cost and complication of developing overseas destinations.

Approaches vary here: the likes of Brown-Forman and Suntory are much more globally focused, while others – Heaven Hill and Sazerac spring most readily to mind – are traditionally hugely reliant on domestic consumption, while exercising caution about exports. Changing that mindset is no easy matter.

There are still success stories in today’s American whiskey market and, if we lift our gazes to consider the long-term picture, the industry has recorded remarkable growth since the turn of the millennium. Nonetheless, distillers will be forgiven if their semiquincentennial celebrations are rather muted in a few weeks’ time.

I have a vague childhood memory of the bicentennial celebrations of 1976, which as it happens came in the midst of a prolonged downturn for the American whiskey industry, as Boomers turned their backs on Bourbon to embrace vodka, wine and Margaritas.

That era (and there are echoes of a similar period for Scotch in the early 1980s) is looked back on by whiskey fans with an air of wistful nostalgia, simply because you got a lot more bang for your buck. Left with oceans of ageing whiskey, blenders had little alternative but to incorporate older, more complex spirit into lower-priced products.

No doubt we will see something similar occurring across Kentucky, Tennessee and beyond in the months and even years to come, as the industry battles to restore balance. I suppose it’s a silver lining of sorts, if you love your American whiskey – but I’m not sure many other people involved in the industry will be raising a glass.