Trump Threatens European Union With 200% Tariffs on Alcohol
Americans have been grappling with the reality of Trump tariffs taking into effect - from higher grocery bills to more expensive electronics, and now alcohol?
On Thursday, President Trump threatened a massive tariff on European alcohol, further worrying people and economists of an escalating trade war.
Reason for the Tariffs
President Trump has threatened to impose a 200% tariff on alcohol from the European Union in retaliation against a 50% tariff the European government put on U.S. spirits on Wednesday.
He said in a post on Truth Social, "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. This will be great for the Wine and Champagne businesses in the U.S.”
After President Trump’s 25% tariffs on steel and aluminum took effect early Wednesday, the EU responded with its own tariffs on $28 billion worth of U.S. goods, including items like bourbon, motorcycles, and boats.
The EU called the U.S. tariffs “unjustified” and described its countermeasures as “swift and proportionate.” These EU tariffs are set to begin in April. Meanwhile, U.S. industries, particularly the spirits sector, are preparing for potential economic impacts as the trade tensions escalate.
Trade spokesperson for the EU, Olof Gill said in a briefing Thursday, "We want to negotiate, to avoid tariffs in the future. They bring nothing but lose-lose outcomes, and we want to focus on win-win outcomes."
He also called for the U.S. to revoke the steel and aluminum tariffs.
France Fights Back
On Thursday, the French Trade Minister, Laurent Saint-Martin stated in a post on X written in French, "Trump is escalating the trade war he has chosen to start” and that his country would "fight back."
He added that they "will not give into threats".
According to Eurostat, alcohol is one of EU's top exports to the U.S. In 2023, France shipped nearly 27 million bottles of champagne to the U.S.
Trump's Response
In an Oval Office meeting with Ireland’s Taoiseach, Micheál Martin on Wednesday, Trump was prepared to respond to the retaliation efforts.
And he did. On Thursday, he called the EU, "one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States."
Adding that the tariff put on U.S. bourbon is "nasty".
It doesn't seem like there's an end in sight for these tariff retaliations, as Trump has signaled his plans for tariffs won't be ending soon.
Even with Wall Street pushing back, Trump has continued to threaten more tariffs, including reciprocal tariffs starting April 2.
In another post on Truth Social, Trump wrote, "The U.S. doesn’t have Free Trade. We have "Stupid Trade." The Entire World is RIPPING US OFF!!!”
U.S. Spirit Industry Responds
The US spirits industry is calling for peace in the ongoing trade dispute with the EU.
The industry wants cooperation, not conflict. Chris Swonger, CEO of the Distilled Spirits Council of the United States, said they prefer "toasts not tariffs".
American alcohol, especially bourbon and whiskey, has often been targeted by retaliatory tariffs during Trump's presidencies. This is because these products are made in states that supported Trump, like Kentucky and Tennessee.
Some countries, like Canada, have not only imposed tariffs but also removed American spirits from store shelves in response to Trump's trade actions.
Jack Daniel's maker Brown-Forman's CEO, Lawson Whiting, criticized the tariffs and said removing their products from shelves was even more damaging.
The impact extends beyond the U.S. Italian winemakers predict Trump's proposed 200% tariffs could cost their industry about $1.1 billion (€1 billion).