Sen. Mitch McConnell said Friday that the steel and aluminum tariffs imposed by the Trump administration could lead to a trade war with some of America’s key allies, which would negatively impact Kentucky industries like bourbon and agriculture.
On Friday, the Trump administration’s new tariffs on steel and aluminum imported from the European Union, Canada and Mexico went into effect. The EU had previously warned that it would impose retaliatory tariffs on American products like bourbon, but had not taken specific measures as of Friday afternoon.
McConnell, who has long advocated for free trade agreements and against protectionist tariffs, made the comments at an event hosted by Greater Louisville Inc., in response to a question about what Congress can do to avoid a trade war.
“It won’t surprise you to know that I’m among those not happy about the prospects of a trade war,” McConnell said. “Just look at it from a Kentucky point of view. You’ve got Toyota impacted. You’ve got farmers impacted. I don’t think anything good will come out of a trade war, and I hope we pull back from the brink here.”
McConnell added that these tariffs would not be good for the overall national economy. “I worry that it will slow, if not impede significantly, the progress we’re making economically as a country,” he said. “So, I’m worried about it, and I hope that this will not go on very long.”
The senator took more questions from reporters about the possibility of a trade war after the GLI event, noting that it would also be bad for the bourbon industry. He also added that “I’m among those who counsel the administration to try to avoid this, and I hope in the end we will be able to.”
Asked by Insider Louisville if Congress could do anything to intervene, McConnell answered “not much.”
“Under the trade law, the president has pretty much all the ability to do these things, so there’s not much we can do to impact it,” McConnell said. “It’s really an executive branch activity, and he’s got the authority to do what he’s chosen to do. It’s just that I think many of us feel that it shouldn’t be done.”
Though Congress could hypothetically pass a law taking such tariff authority away from Trump, McConnell noted that “he’d have to sign the bill.” He added that members of Congress “are left to kind of lobby not to take this approach, which I have been doing for months and expect to continue to do.”
Asked if the EU had threatened to retaliate with bourbon tariffs to get the attention of the Senate majority leader, McConnell answered: “Oh, they’ve got my attention. They didn’t need to do that.” He also noted that the EU had threatened tariffs on Harley-Davidson motorcycles, which are made in the home state of House Speaker Paul Ryan.
“These are our friends, these are not enemies,” McConnell said. “Canada, Mexico and Europe, these are our allies, and we need to work this out in a way that is comforting to everyone.”
McConnell has also advised Trump in public statements over the past year to embrace free trade and avoid protectionist tariffs, including at the Kentucky Farm Bureau Country Ham Breakfast last August, when he warned that moving away from free trade agreements would hurt Kentucky’s agricultural industry and its exports.
GLI President and CEO Kent Oyler issued a statement Friday explaining that the local chamber “supports trade agreements that promote open, free, and fair trade with other countries,” and “opposes the imposition of tariffs or any approach to international trade that could bring harm to Greater Louisville businesses or limit access to global markets.”
Tom Donohue, the president and CEO of the U.S. Chamber of Commerce, issued a memo to their board of directors Thursday estimating that the tariffs threatened and enacted by the Trump administration would put 2.6 million American jobs at risk.
Local bourbon giant Brown-Forman relies heavily on international sales, with over half its revenue generated outside of the United States. The company’s shares fell 2.1 percent on Thursday, and then fell another 1.6 percent on Friday, despite the Dow being up 0.8 percent that day due to a positive jobs report.
Eric Gregory, the president of the Kentucky Distillers’ Association, issued a statement on Thursday that they have long advocated for free and fair trade, “which has catapulted our legendary craft into an unparalleled chapter of global success.”
“We remain hopeful that continued negotiations will avoid a costly trade war and protect our allies and partnerships around the world, which will continue to benefit spirits producers and consumers for years to come,” stated Gregory.
Mac Brown, the chairman of the Republican Party of Kentucky and the retired vice president of Brown-Forman, told WDRB on Friday that retaliatory tariffs might hurt the company’s growth oversees and that “nobody likes” Trump’s tariffs.
As of Friday afternoon, the EU had not yet applied retaliatory tariffs against American products, but had filed a complaint with the World Trade Organization against the United State’s “pure protectionist” and “illegal” tariffs on steel and aluminum.
“We are not in a trade war, but we are in a very difficult situation caused by the United States,” stated Cecilia Malmström, the EU trade commissioner. While stating that she would not use the term “trade war” because “it has a psychological effect,” she added that “the U.S. is playing a dangerous game here.”
In eastern Kentucky on Friday, Gov. Matt Bevin participated in a ceremonial groundbreaking for a new manufacturing plant of Braidy Industries, an aluminum company that was aided into existence by a $15 million direct investment of state dollars and $15 million in state tax incentives. Braidy’s CEO has stated that he supports Trump’s aluminum tariffs, as they will provide an overall benefit to the company.
Asked Friday if he hopes Bevin runs for re-election as governor — which Bevin currently won’t comment on — McConnell said that he does, as “I think he’s doing a great job.”
Boris Ladwig contributed reporting.