U.S. President Donald Trump has threatened to impose a 200% tariff on European wine, champagne, and other alcoholic beverages if the European Union proceeds with its planned 50% tariff on American whiskey. This marks a significant escalation in the ongoing trade tensions between the U.S. and the EU.
The EU’s proposed tariff on American whiskey is a retaliatory measure in response to the U.S. imposing 25% tariffs on steel and aluminum imports. European Commission President Ursula von der Leyen expressed regret over the U.S. tariffs, stating that they disrupt supply chains and harm economies on both sides. She emphasized the EU’s willingness to negotiate a resolution to the dispute.
The potential 200% tariff on European alcoholic products could lead to significant price increases for U.S. consumers. Meanwhile, shares of European alcoholic beverage makers fell on the news, with LVMH dropping 2.2%, spirits maker Pernod Ricard declining 3.6%, and Remy Cointreau falling 4.5%.
The EU announced that additional tariffs would take effect in early April, targeting American products such as motorcycles, jet skis, cranberries, and beef. Some of these tariffs will significantly impact states that voted Republican in the last U.S. presidential election, including Kentucky and Tennessee, which are major whiskey exporters.
Trump’s latest actions have further fueled the trade war, prompting retaliatory measures from affected nations. He has also signaled plans to impose tariffs on industries such as agriculture, pharmaceuticals, and semiconductors.
The ongoing tariff disputes are affecting financial markets, with the S&P 500 falling nearly 10% from its February high. While U.S. stocks saw a recovery this week, volatility remains a concern. Despite the market downturn, Trump has dismissed concerns, calling the sell-off a “buying opportunity” and framing the disruptions as necessary steps to reshape American industry and supply chains.
