President Donald Trump has threatened to impose a 200% tariff on wine, champagne, and other alcoholic beverages from the European Union in response to the bloc’s decision to reinstate a 50% levy on American whiskey. The move is the latest escalation in a trade dispute that has rattled financial markets and threatened key export industries on both sides of the Atlantic.
Trump announced the potential tariff on Thursday via his Truth Social platform, describing the EU as “one of the most hostile and abusive taxing and tariffing authorities in the world” and calling its whiskey tariff “nasty.” He warned that unless the EU immediately withdraws the levy, the U.S. will retaliate with its own steep import duties on European alcohol. “This will be great for the Wine and Champagne businesses in the U.S.,” he added.
The EU’s whiskey tariff, set to take effect on 1 April, is part of a broader €26bn ($28bn) package of countermeasures in response to Trump’s decision to reimpose tariffs on European steel and aluminum imports. The 50% tax on American whiskey revives a trade battle that first erupted during Trump’s first term when the EU imposed a 25% levy in retaliation for U.S. metals tariffs. That measure led to a 20% drop in American whiskey exports to Europe before it was suspended in 2021.
Economic impact
Trump’s tariff threat has already affected European markets. Shares of major alcohol producers tumbled on Thursday, with LVMH, owner of Moët & Chandon and Hennessy, slipping 1.4%, while Pernod Ricard, the maker of Absolut Vodka and Jameson Irish Whiskey, fell 3.9%. Rémy Cointreau, which owns Cognac brands, declined 3.5%, and Italy’s Campari Group dropped 4.2%.
The U.S. is a key market for European alcohol producers, accounting for €13.1bn ($14.3bn) in beverage exports last year. Wine alone made up €5.2bn, with the U.S. purchasing nearly 20% of all European wine exports. Spirits and liqueurs accounted for €5.1bn, representing 22% of the EU’s total exports in that category.
The impact of a 200% tariff could be severe. “If these tariffs are enacted, the U.S. market for European wines and spirits will essentially disappear,” said Ignacio Sánchez Recarte, secretary-general of Comité Européen des Entreprises Vins. “There is no alternative to sell all this wine.”
The American spirits industry has also expressed concern. The Distilled Spirits Council of the United States warned that continued escalation could harm U.S. whiskey producers, who rely on European markets for a significant portion of their exports. “There is no winner in a trade war,” the council said in a statement.
Political reactions
European leaders have vowed to push back. French Trade Minister Laurent Saint-Martin called Trump’s move an “escalation of the trade war he has chosen to start” and said France would “always protect our industries.” European Commission President Ursula von der Leyen defended the EU’s response, saying it was “proportionate” and aimed at protecting European businesses.
EU trade officials are now preparing discussions with their U.S. counterparts in an effort to prevent further escalation. “We want to negotiate, to avoid tariffs in the future,” said EU trade spokesperson Olof Gill. “They bring nothing but lose-lose outcomes.”
Meanwhile, Trump’s commerce secretary, Howard Lutnick, downplayed concerns, arguing that the EU’s higher tariffs on U.S. goods warranted a response. “Their tariffs are way up here, and our tariffs are down here. How about: Relax. Let us balance it,” he said in an interview with Bloomberg Television.
Despite the market turmoil, Trump has shown no signs of backing down. “The U.S. doesn’t have Free Trade. We have ‘Stupid Trade,’” he wrote on Truth Social. “The Entire World is RIPPING US OFF!!!”
