Trump threatens retaliatory 200% tariff on European wine after EU proposes American whiskey tariff

U.S. President Donald Trump has threatened to impose tariffs of up to 200% on European wines, champagnes, and spirits if the European Union proceeds with its plan to levy tariffs on American whiskey. This threat comes as the EU is expected to implement the tariffs starting April 1st.

Trump stated on social media that the EU is "one of the most hostile and abusive when it comes to taxes and tariffs of any institution in the world, set up only to take advantage of the U.S." He indicated that if the EU does not immediately drop the tariffs, the U.S. will soon impose a 200% tariff on all wines, champagnes, and alcoholic products coming from France and other EU member states.

Trump also claimed that this move would greatly benefit the American wine and champagne business. He believes that taxing imported goods may bring some economic pain but will ultimately promote domestic manufacturing and win greater respect for the U.S. from other countries. However, as the U.S. and the EU wrangle over alcohol tariffs, the impact of a trade war could ripple down to consumers, and it remains unclear how import duties will be divided among winemakers, distillers, brewers, distributors, retailers, and consumers.

French Minister Delegate for Foreign Trade, Olivier Becht, stated on social media: "Trump is escalating the trade war he has chosen. 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." However, European producers believe that trade wars are economically damaging. The Federation of French Wine and Spirits Exporters has called on the EU and its member states to remove wines and spirits from the list of products affected by U.S. tariffs on steel and aluminum. The federation said it was "dismayed" by the announcement from the EU because the French wine and spirits industry is facing a double vulnerability from economic and geopolitical issues.

Trump's latest tariff threat, which indicates that even companies that publicly support him could become collateral damage, raises questions about whether the broader business community is willing to openly challenge a series of trade wars that have already hurt the stock market and frightened consumers worried about worsening inflation. U.S. bourbon whiskey manufacturers have urged Trump to abandon the trade war. Chris Swonger, president and CEO of the Distilled Spirits Council of the United States, said in a statement: "The U.S. and EU spirits industries have been a model of fair and reciprocal trade since 1997, with zero tariffs." He called on Trump to reach a spirits agreement with the EU to restore zero tariffs, which would create jobs in the U.S. and increase manufacturing and exports for the American hospitality industry.