Trump’s 200% Tariff Threat Puts €13bn European Alcohol Industry at Risk

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By Staff Writer with Agencies

Donald Trump’s threat to impose a 200% tariff on European alcohol has rattled markets, sending shares of Campari, Pernod Ricard, and LVMH tumbling. The U.S., which accounts for €13.1 billion in EU beverage exports, particularly in wine and spirits, is at the center of this brewing trade conflict.

A Trade War Brews

In a statement on Truth Social, the former U.S. president announced that his administration would impose a 200% tariff on European wines, champagnes, and other alcoholic products unless the European Union removes a 50% tariff on American whiskey. This move follows the EU’s decision to reinstate and double its tariff on American whiskey to 50%, effective April 1, 2025, in response to U.S. tariffs on European steel and aluminum.

Key Trade Figures

The United States is a vital market for European alcohol producers, having imported €13.1 billion worth of beverage, spirit, and vinegar products from the EU in 2024, according to the International Trade Centre. Among these, €5.2 billion came from wine, with the U.S. accounting for nearly 20% of the EU’s total wine exports. The spirits and liqueurs sector is even more vulnerable, with €5.1 billion in shipments to the U.S. last year—22% of the bloc’s total exports in this category. European beer exports, which totaled €1.1 billion to the U.S. last year, are comparatively less reliant on American demand, representing about 12% of total EU beer exports.

Trump’s Justification

“The European Union, one of the most hostile and abusive taxing and tariffing authorities in the world… has just put a nasty 50% tariff on whisky. 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.”

Market Reactions

Trump’s announcement sent European alcohol stocks plummeting. By 3:00 p.m. Central European Time, shares of Davide Campari-Milano, the Italian owner of Campari, Aperol, and Wild Turkey, had dropped 4.2%. France’s Pernod Ricard, behind Absolut Vodka, Jameson Irish Whiskey, and Martell Cognac, fell 3.9%. Dutch brewing giant Heineken slid 0.6%, while LVMH, the luxury conglomerate that owns Moët & Chandon and Hennessy, declined 1.4%.

Conversely, American distillers experienced gains. Brown-Forman, the maker of Jack Daniel’s, rose 2.1%, reflecting investor optimism that Trump’s pressure could lead to the removal of EU tariffs on American whiskey, thereby reopening European markets to U.S. producers.

Historical Context

In 2018, the EU initially imposed a 25% tariff on American whiskey in retaliation for U.S. tariffs on European metals. This led to a sharp decline in U.S. whiskey exports to Europe. Although these tariffs were suspended in 2021, the U.S. recently reintroduced duties on European steel and aluminum, prompting the EU’s retaliatory tariff increase.

The Road Ahead

The escalating trade dispute places European alcohol producers in a precarious position, with the threat of losing access to a lucrative market. American consumers, long accustomed to high-end European wines and spirits, may face higher prices or turn to domestic alternatives. Meanwhile, U.S. distillers stand to benefit from renewed market access if the EU relents on its whiskey tariffs.

The coming months will be critical in determining whether the EU and the U.S. can negotiate a resolution or whether this trade war will further escalate, dealing a significant blow to Europe’s alcohol industry.