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Donald Trump has threatened a 200 per cent retaliatory tariff on alcohol imports from the EU if the bloc imposes a duty on US whiskey, in the latest salvo in his escalating trade war.
Posting on his Truth Social platform on Thursday, the US president said the move was a response to the EU’s decision to impose a “nasty” 50 per cent tariff on whiskey.
“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 US,” Trump wrote.
The EU said on Wednesday it would hit whiskey with tariffs of up to 50 per cent from April 1 in retaliation for Washington’s decision to impose levies on steel and aluminium imports.
Tariffs on EU alcohol exports to the US would be a major blow to a high-profile European industry and knock some of the region’s biggest companies, including France’s LVMH, the maker of Dom Pérignon and Moët & Chandon champagne.
Shares of drinks companies sank following Trump’s post, with LVMH falling as much as 2.2 per cent, Pernod Ricard down as much as 4.3 per cent and brewer Heineken sliding 1.2 per cent.
France’s trade minister Lauren Saint-Martin accused Trump of “doubling down on the trade war he chose to unleash”, adding that “we will not give in to threats and we will always protect our sectors”.
Since his inauguration in January, Trump has imposed a series of escalating tariffs on the US’s biggest trading partners. The chaotic rollout of these levies, which has been marked by several sudden U-turns, has rattled businesses and financial markets.
Canada on Thursday initiated a World Trade Organization dispute complaint over tariffs the US placed on certain steel and aluminium products that took effect on Wednesday. Ottawa subsequently announced retaliatory levies on almost C$30bn ($21bn) of US goods.
The latest exchange of threats between Trump and the EU echoes a dispute during his first term, when Brussels imposed 25 per cent tariffs on American whiskey in retaliation for US levies on metals.
According to the Distilled Spirits Council of the United States, American whiskey exports to the EU tumbled 20 per cent to $440mn between 2018 and 2021, when the tariffs were lifted. The value of whiskey exports to the bloc rebounded to $699mn last year.
Industry executives in Europe and the US reacted with dismay to the prospect of being caught in the crosshairs of another trade dispute.
“Yet again, spirit drinks have become collateral damage in an unrelated trade dispute,” said Pauline Bastidon, trade and economic affairs director at trade group spiritsEurope, adding that the industry was already battling slowing sales in the US and China.
Brown-Forman, based in Louisville, Kentucky, and owner of Jack Daniel’s and Old Forester, and Japanese group Beam Suntory, the maker of Jim Beam and Maker’s Mark Kentucky bourbon, would be among the hardest hit in the event the EU presses ahead with its tariffs.
Brown-Forman could see a 10 per cent hit to group operating income from the levy, according to estimates by analysts at Bernstein.
Chris Swonger, president of the Distilled Spirits Council, said: “We urge President Trump to secure a spirits agreement with the EU to get us back to zero-for-zero tariffs.”
In Italy, which exported almost €2bn of wine to the US last year, industry groups urged the EU to quickly reach an agreement with the Trump administration.
“Someone must start showing some common sense and Europe should be the first to do so,” said Luigi Pio Scordamaglia, director of international relations at Coldiretti.
Alongside tariffs on whiskey, Brussels said it would apply duties of up to 50 per cent on €28bn of US goods, including jeans and Harley-Davidson motorbikes.
EU officials said they had deliberately targeted products made in Republican states in a bid to boost opposition among lawmakers to Trump’s tariffs.
The European Commission declined to comment.
Additional reporting by Ian Johnston in Paris and Amy Kazmin in Rome
This article has been amended since publication to correct the value of US whiskey exports to the EU
