Trump threatens 200 pc tariff on European wine amid EU's proposed whiskey tax

Washington: President Donald Trump has threatened to impose a 200% tariff on European wines, Champagne and spirits if the European Union moves forward with its planned tariff on American whiskey. The EU’s proposal, set to take effect on April 1, is a retaliatory measure against US steel and aluminum tariffs. In response, Trump announced on social media that he would escalate the trade dispute if the EU implemented its 50% tariff on American whiskey.

"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," he wrote, adding that the move would benefit US wine and Champagne businesses.

Trump’s aggressive trade stance has been a defining aspect of his presidency, as he argues that higher tariffs on imports will ultimately strengthen domestic industries. However, the ongoing trade tensions between the U.S. and the EU could significantly impact consumers, with the added costs being absorbed across various sectors, from vintners and distillers to distributors and retailers.

Industry insiders have expressed concerns over the potential consequences. Holly Seidewand, owner of First Fill Spirits in New York, highlighted the wider impact of such tariffs. “This ongoing tariff war doesn’t just harm importers — it weakens domestic brands, disrupts distributors, and squeezes retailers who rely on global selections,” she said. “In the end, consumers will bear the brunt of it all."

Ronnie Sanders, CEO of Vine Street Imports in New Jersey, warned that a 200% tariff would be devastating for the European wine market in the U.S. “I don’t think customers are prepared to pay two to three times more for their favorite wine or Champagne,” he remarked.

On the European side, officials remain firm in their stance against Trump’s trade policies. French trade minister Laurent Saint-Martin accused Trump of escalating a conflict of his own making. “Trump is escalating the trade war he has chosen,” he stated. “France, together with the European Commission and our partners, is determined to fight back. We will not give in to threats and will always protect our industries.”

Despite the political standoff, European producers are concerned about the financial implications. The French Wine and Spirits Exports Federation (FEVS) urged the EU to exclude wines and spirits from tariff lists, emphasizing that the sector was already vulnerable. The organisation described the EU’s announcement as disheartening, given the fragile state of the industry.

Trump’s move could also have repercussions for businesses that have previously supported him. Bernard Arnault, CEO of luxury goods giant LVMH, attended Trump’s inauguration in 2017. However, the retaliatory tariffs could now impact LVMH’s wine and spirits brands, including Moët & Chandon, Krug, Veuve Clicquot, and Hennessy. Italian spirits company Campari, which the White House recently highlighted as a potential U.S. investor, may also suffer from the tariffs.

Asked about his approach to the EU’s tariffs, Trump made his position clear. “Of course I will respond,” he told reporters during an Oval Office exchange.

His administration has pursued a broad tariff policy against multiple nations, including Canada, Mexico, and China, with new reciprocal tariffs on the EU, Brazil, and South Korea set to take effect on April 2. European Commission President Ursula von der Leyen announced that the EU would respond in kind, imposing countermeasures worth 26 billion euros ($28 billion) against U.S. tariffs affecting steel, aluminum, textiles, home appliances, and agricultural goods.

European Commission spokesman Olof Gill emphasized that the EU was prepared for any further developments. “We call on the U.S. to immediately revoke the tariffs imposed yesterday, and we want to negotiate to avoid tariffs in the future,” he said. "They bring nothing but lose-lose outcomes, and we want to focus on win-win outcomes.”

Meanwhile, the U.S. whiskey industry is urging Trump to de-escalate the situation. Chris Swonger, president and CEO of the Distilled Spirits Council, called for a return to tariff-free trade. “The U.S.-EU spirits sector is the model for fair and reciprocal trade, having zero-for-zero tariffs since 1997,” he noted. “We urge President Trump to secure a spirits agreement with the EU to get us back to zero-for-zero tariffs, which will create U.S. jobs and increase manufacturing and exports for the American hospitality sector. We want toasts not tariffs.”

The whiskey industry has already felt the impact of trade disputes. When the EU responded to Trump’s 2018 tariffs with a 25% tax on U.S. whiskey, exports to Europe dropped by 20% through 2021. With Trump’s latest round of tariffs, industry leaders fear further disruption. Similarly, his separate tariffs on Canada and Mexico could place thousands of jobs at risk.

As tensions rise, the looming trade war between the U.S. and Europe threatens to reshape markets, impact businesses on both sides of the Atlantic, and leave consumers paying the price.

AP