Rum winners and losers in new tax and tariff policies - General Tiki

BBR Boom Boom Room Tiki Centralite Denver area Joined: May 08, 2008 Posts: 70	BBR Boom Boom Room Posted posted on Thu, Jul 24, 2025 10:59 AM A note from your (now retired) Washington lobbyist, Tiki Central member: The inaccurately named "Big Beautiful Bill" that was recently signed into law increases a tax subsidy for Puerto Rican and U.S. Virgin Islands rum, known as the Rum Cover-Over Program. The U.S. collects taxes on rum like it does other spirits produced domestically or imported. But in a unique arrangement, it sends almost all of that revenue back to the U.S. territories, $13.25 per proof gallon out of $13.50 collected. That amount lapsed back to $10.50. The new law restored it to $13.25 and made that amount permanent. Here is a deep dive into the program for those who are interested: https://distilling.com/distillermagazine/the-rum-cover-over On the other hand, Trump recently announced an expected (with him, always subject to change) unilateral 10% tariff on imports from Caribbean and small African countries, including obviously our beloved rum. So, three cheers for Don Q and Cruzan, my favorites from Puerto Rican and U.S. Virgin Islands, but stock up on Coruba, Diplomático, Appleton Estate, El Dorado and the rest before the tariffs go into effect. Protectionism always hurts the consumer in the end, be these policies subsidies or tariffs. Oh well, I'm glad I'm out of the lobbying game now, having moved to the Denver area after I retired, and now away from the Washington Craziness.

A note from your (now retired) Washington lobbyist, Tiki Central member:

The inaccurately named "Big Beautiful Bill" that was recently signed into law increases a tax subsidy for Puerto Rican and U.S. Virgin Islands rum, known as the Rum Cover-Over Program. The U.S. collects taxes on rum like it does other spirits produced domestically or imported. But in a unique arrangement, it sends almost all of that revenue back to the U.S. territories, $13.25 per proof gallon out of $13.50 collected. That amount lapsed back to $10.50. The new law restored it to $13.25 and made that amount permanent.

Here is a deep dive into the program for those who are interested: https://distilling.com/distillermagazine/the-rum-cover-over

On the other hand, Trump recently announced an expected (with him, always subject to change) unilateral 10% tariff on imports from Caribbean and small African countries, including obviously our beloved rum.

So, three cheers for Don Q and Cruzan, my favorites from Puerto Rican and U.S. Virgin Islands, but stock up on Coruba, Diplomático, Appleton Estate, El Dorado and the rest before the tariffs go into effect.

Protectionism always hurts the consumer in the end, be these policies subsidies or tariffs. Oh well, I'm glad I'm out of the lobbying game now, having moved to the Denver area after I retired, and now away from the Washington Craziness.