Suntory Holdings is doubling down on whiskey with Trump tariffs looming. 

"So we've been stockpiling the products in Europe, but it's not enough. How long would it last? I think at least a year," Suntory Holdings CEO Tak Niinami told Yahoo Finance at the World Economic Forum in Davos, Switzerland, about actions his team has taken to blunt potential tariff impacts.

By piling up the booze, Suntory is attempting to lock in its costs should they skyrocket amid fresh tariffs from the Trump administration. In addition to Japanese whiskey, the company owns bourbon brands like Jim Beam, Maker's Mark, and Basil Hayden. 

The threat of a trade war hammering the liquor industry is real, and a near-term dark cloud hangs over the space. 

In 2018, the European Union slapped a 25% tariff on American whiskey as a retaliatory measure to Trump's tariffs on European steel and aluminum. American whiskey exports to the EU plunged 20% through 2021.

The Trump administration responded by putting a 25% import tariff on single malt scotch whiskey. 

After initially leaving the tariffs in place, the Biden administration reversed course and signed an agreement with the EU that suspended the tariffs in December 2023. 

Read more: How do tariffs work, and who really pays them?

The suspension is set to expire in March of this year, however. If a new agreement is not reached, the tariffs on exports of whiskey to the EU will hit a brutal 50%. 

"We are preparing for that tariff from the European continent, and vice versa. We've been preparing for it because that dispute has been studied well before," Niinami added.

Suntory Holding stock has dropped 13% in the past six months as investors process potential tariff impacts on the business. Shares of Johnny Walker maker Diageo (DEO) have dropped by 10% in the last six months, while Jameson maker Pernod Ricard (RI.PA) is off by 22%.

Niinami said tariffs could lead to higher prices, and new tariffs on China could be bad news for consumers. 

"I think the world will be in an inflationary scenario because [the] US will be worse in terms of inflation," Niinami explained. "So I think it's not realistic because, still, US relies on the goods from China. And considering the midterm elections, President Trump has to think about what to do with inflation. Inflation is the most important issue for the US."

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Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and on LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com. Three times each week, Sozzi fields insight-filled conversations with the biggest names in business and markets on Yahoo Finance's Opening Bid podcast. Find more episodes on our video hub. Watch on your preferred streaming service. Or listen and subscribe on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.

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