Donald Trump has revived his taste for tariffs, threatening a 200% levy on EU wines, Champagnes and spirits if Brussels doesn’t back down on its latest tax on American whiskey.
Posting on Truth Social — the alt-tech social media platform owned by Trump Media & Technology Group (TMTG) — the President slammed the EU’s “nasty” 50% tariff on whiskey and vowed swift retaliation if it isn’t rescinded:
“If this Tariff is not removed immediately, the US will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the US,” he wrote.
Whether it will be quite so great for consumers, importers and transatlantic trade is another matter entirely.
Brussels vs Washington: another round of tit-for-tat
This latest flare-up in US-EU trade tensions stems not from whiskey or wine but from an old grudge over steel and aluminium. The European Commission’s move to reimpose tariffs on American whiskey, set to take effect in April, is part of a broader retaliatory package aimed at rebalancing a long-running metals dispute.
Industry groups on both sides of the Atlantic have wasted no time in voicing their frustration.
SpiritsEUROPE trade and economic affairs director Pauline Bastidon lamented that “yet again, spirit drinks have become collateral damage in an unrelated trade dispute,” warning that punitive tariffs will damage businesses, cost jobs and disrupt investment. The zero-for-zero tariff agreement that once helped the transatlantic spirits trade balloon by 450% between 1997 and 2018 now hangs in the balance.
European wine producers are equally dismayed. The US is the largest export market for EU wines, and Trump’s threatened 200% tariff would be catastrophic for sales of Bordeaux, Barolo and Brut. Industry representatives have urged Brussels to rethink its approach, warning that retaliatory measures will hit small businesses, stall investment and ultimately leave consumers footing the bill.
A familiar hangover
If all of this sounds familiar, that’s because it is. The last time Trump waged a tariff war on European wines, importers and retailers were forced into damage control, absorbing much of the cost themselves rather than passing it on to consumers. The result? Strangled margins, disrupted supply chains and a less competitive market for both US and EU producers.
American whiskey distillers, too, know this story all too well. The last round of EU tariffs, introduced in 2018, led to a 41% drop in US whiskey exports to Europe.
Meanwhile, the financial markets have already started to react. European shares dipped on Thursday amid trade war concerns, with France’s Cac 40 and Germany’s Dax slipping into negative territory. Drinks giants Pernod Ricard and Rémy Cointreau saw share prices slip, while luxury group LVMH, owner of Moët & Chandon, also suffered losses. Over in New York, the S&P 500 edged down as Wall Street digested the potential fallout.
Who really pays the price?
Trump has never been shy about his views on the EU, once again accusing the bloc of being “one of the most hostile and abusive taxing and tariffing authorities in the world” and claiming it was “formed for the sole purpose of taking advantage of the United States.”
Brussels, by contrast, struck a more measured tone. European Commission president Ursula von der Leyen reminded Washington that transatlantic trade “brought prosperity and security to millions of people” and created “millions of jobs on both sides of the Atlantic.”
But for those in the wine and spirits world, these words are little comfort. The reality is that trade wars rarely achieve their intended goals. Instead, they raise prices, hurt businesses and damage relationships built over decades.
The fundamental absurdity of this situation is that the drinks industry is one of the most globally connected. Producers, distributors and retailers operate across borders in a delicate ecosystem that tariffs serve only to disrupt. History shows that once one side imposes duties, the other retaliates, creating an escalating cycle that benefits no one.
