In the latest development of an ongoing trade dispute, U.S. President Donald Trump has warned that the U.S. will impose a 200% tariff on alcoholic products, including wine, champagne, and other spirits, imported from the European Union (EU).
The threat follows the EU’s decision to introduce a 50% tariff on U.S.-produced whiskey in retaliation for American tariffs on steel and aluminum. This escalation underscores the deepening tensions between the U.S. and its major trade partners, specifically in the wake of new tariffs on metal imports.
If enacted, Trump’s tariff proposal could disrupt the thriving trade in European alcohol, which is valued at over €4.5 billion annually, according to the Comité Européen des Entreprises Vins.
A Rising Trade Conflict
The proposed tariff on European alcoholic products is the latest salvo in a broader trade war between the U.S. and the EU. Trump’s threat follows the EU’s decision to impose a 50% duty on U.S. whiskey, a direct countermeasure against U.S. tariffs on European steel and aluminum.
According to a spokesperson for the European Commission, talks are being prepared between the U.S. and EU to address the situation, with European trade commissioner Maroš Šefčovič reaching out to U.S. officials for discussions, as reported by the BBC.
While trade wars often focus on industrial goods, the decision to target alcohol is notable due to the high-profile nature of products like French wine and Tennessee whiskey. Industry representatives have expressed concern that the tariffs will severely damage the market for these goods, with potential job losses across the supply chain.
Mary Taylor, a U.S.-based importer of European wines, called the proposal a “giant threat to our livelihoods” that could force businesses to close their doors.
Economic Repercussions for the Alcohol Industry
The EU’s alcohol exports to the U.S. are substantial, with over €4.5 billion worth of wine alone being shipped each year. Ignacio Sánchez Recarte, secretary-general of the Comité Européen des Entreprises Vins, warned that the imposition of a 200% tariff would have catastrophic consequences for the European wine industry.
According to the organization, the U.S. is the largest export market for European wines, and such tariffs could force producers to abandon the market entirely.
In response to the ongoing tensions, shares in major European spirit makers have already been affected. Pernod Ricard and LVMH, which owns Hennessy, both saw their stock prices fall sharply following news of Trump’s tariff threat.
The effects of a 200% tariff would reverberate through the global economy, affecting not just the alcohol industry but also U.S. businesses reliant on European imports.
