On Thursday, President Donald Trump threatened to implement a substantial tariff on European alcoholic beverages in retaliation for the European Union’s countermeasures against his steel and aluminum tariffs. This exchange marks a significant escalation in a trade conflict that risks becoming increasingly volatile.
In a message posted on Truth Social, Trump announced that his administration would impose a 200% tariff on alcoholic drinks imported from the EU unless the European government withdraws the 50% tariff it enacted on U.S. spirits the previous day.
“If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES,” Trump stated. “This will be great for the Wine and Champagne businesses in the U.S.”
The rapid exchange of tariffs between the U.S. and Europe within just 36 hours illustrates how trade disputes can escalate quickly. Following the implementation of Trump’s 25% tariffs on aluminum and steel at midnight on Wednesday, the EU promptly responded, labeling the U.S. action as “unjustified.”
The EU’s counteractions include tariffs on approximately €26 billion ($28 billion) worth of American products, such as boats, bourbon, and motorcycles. These measures, which are scheduled to take effect in April, have been described by the EU as “swift and proportionate.”
The American spirits industry expressed concern on Wednesday, preparing for the impact of the retaliatory tariffs.
If the trade conflict continues to intensify, American alcohol producers may face increased retaliation.
France vows to respond
On Thursday, French Trade Minister Laurent Saint-Martin stated that “Trump is escalating the trade war he has initiated” and affirmed that France would “respond vigorously.”
“We will not succumb to threats and will consistently defend our industries,” he expressed in a post on X.
Olof Gill, the trade spokesperson for the EU Commission, urged the US to “immediately lift” the steel and aluminum tariffs that were imposed the previous day during a briefing on Thursday. “We seek to negotiate to prevent future tariffs,” he remarked. “These tariffs yield only negative results, and our goal is to achieve mutually beneficial outcomes.”
Gill informed CNN on Thursday that “preparations are underway” for discussions between EU trade officials and their US counterparts.
According to data from the EU, alcoholic beverages rank among the top exports to the US.
In 2023, France exported nearly 27 million bottles of Champagne to the US, as reported by the industry trade group Comité Champagne, making the US the leading market for this premium drink after the United Kingdom.
The Irish Whiskey Association also issued a statement on Thursday, warning that tariffs jeopardize “jobs, investments, and businesses, and could have devastating effects” on their industry.
The association stated, “There are no victors in a trade war,” emphasizing that the United States is its largest trading partner.
In a meeting at the Oval Office on Wednesday with Ireland’s Taoiseach, Micheál Martin, Trump hinted at America’s potential retaliation. He asserted that he would take action in response to the EU’s tariffs.
“Of course I will respond,” Trump declared.
On Thursday, he criticized the EU, labeling it as “one of the most hostile and abusive taxing and tariffing authorities in the world,” claiming it was established solely to exploit the United States.
He described the retaliatory tariff imposed on American bourbon as “nasty.”
However, retaliation often leads to further retaliation, creating a cycle with no clear resolution. Trump has indicated that he does not plan to abandon his tariff strategy anytime soon.
Despite increasing opposition from Wall Street, Trump has threatened to implement a variety of additional tariffs, including reciprocal tariffs set for April 2. If these tariffs are enacted, they could provoke a response from the EU.
“The U.S. doesn’t have Free Trade. We have ‘Stupid Trade,'” Trump posted on Truth Social Thursday. “The Entire World is RIPPING US OFF!!!”
US Spirits Industry Faces Challenges
On Thursday, the US spirits sector urged for a measured response to current challenges.
“We prefer to celebrate with toasts rather than face tariffs,” stated Chris Swonger, CEO of the Distilled Spirits Council of the United States.
Swonger emphasized that the US-EU spirits trade relationship serves as a benchmark for equitable and reciprocal trade, having maintained zero tariffs since 1997.
American alcoholic beverages have frequently been subjected to retaliatory tariffs during each of Trump’s administrations. A significant portion of bourbon and whiskey production occurs in states that supported Trump, such as Kentucky and Tennessee.
For instance, Canada recently imposed tariffs on Kentucky bourbon in retaliation for Trump’s trade policies and threats directed at the country. In response to these tariffs, several Canadian retailers have removed American spirits from their shelves.
Last week, Lawson Whiting, CEO of Brown-Forman, the company behind Jack Daniel’s, criticized the tariffs, noting that the decision to withdraw their products from stores was even more detrimental.
Chris Swonger expressed disappointment over the EU’s 50% tariffs on American spirits, stating that they would significantly undermine efforts to revitalize US spirits exports to European markets.
Whiting, in an interview with Wine and Spirits Daily, remarked that characterizing the tariff situation as dynamic would be an understatement. While Brown-Forman had anticipated retaliatory measures, he acknowledged that the escalation was expected but still places the company in a challenging position.
Additionally, the Unione Italiana Vini, representing Italian winemakers, forecasted that Trump’s tariffs could result in a loss of €1 billion ($1.1 billion) for the industry.
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