Share and Follow
US President Donald Trump has threatened a 200 per cent tariff on European wine, champagne and spirits if the European Union goes forward with a planned tariff on American whiskey.
The European tariff was expected to go into effect on April 1.
Trump in a social media posting called the EU “one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States”.
“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 EU REPRESENTED COUNTRIES,” Trump said.
“This will be great for the Wine and Champagne businesses in the US.”
The US president has defined his opening weeks in the White House with near-daily drama regarding tariffs, saying that taxing imports might cause some economic pain but would eventually lead to more domestic manufacturing and greater respect for America.
But with the EU and Trump now tussling over alcohol tariffs, the impact of a trade war could surface for consumers. It’s unclear how the import taxes would be absorbed among vintners, distillers, brewers, distributors, retailers and consumers.
Similarly, Europe’s response to Trump’s steel and aluminium tariffs means that the cost of a $US30 bottle of bourbon in Paris could increase to $US45.
As of now, Europe seems unwilling to back down.
“Trump is escalating the trade war he has chosen,” Laurent Saint-Martin, the French delegate minister for foreign trade, said on X.
“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.”
Still, European producers see the trade war as financially destructive.
They threw it all behind Trump – and lost more than $300 billion
The French Wine and Spirits Exports Federation had called on the EU and its member states to remove wines and spirits from the lists of products hit by tariffs in response to the US duties on steel and aluminium.
The FEVS said on Wednesday it was “dismayed” by the EU announcement, which came “when the French wine and spirits sector is extremely vulnerable, for both economic and geopolitical reasons”.
Trump’s latest tariff threats suggested that even companies that have publicly stood by him could be collateral damage, raising questions about whether the wider business community would be willing to openly challenge a series of trade wars that have hurt the stock market and scared consumers who worry about inflation worsening.
Bernard Arnault, the CEO of French luxury goods company LVMH, attended Trump’s inauguration in January. His company’s wine and spirits brands, which include Moët & Chandon, Krug, Veuve Clicquot and Hennessy, could be subject to the retaliatory tariffs the US president is seeking.
The Italian company Campari could also be hurt, after the White House highlighted it at Tuesday’s press briefing for possibly opening a US factory.
The Republican president had signalled on Wednesday that he intended to take the action.
“Of course I will respond,” Trump told reporters during an Oval Office exchange with reporters.
Trump, in announcing the new steel and aluminium tariffs on Wednesday, he openly challenged US allies and vowed to take back wealth “stolen” by other countries, and he drew quick retaliation.
He has separate tariffs on Canada, Mexico and China, with plans to also tax imports from the European Union, Brazil and South Korea by charging “reciprocal” rates starting on April 2.
Those measures cover not just steel and aluminium products but also textiles, home appliances and agricultural goods.
Shortly before Trump’s announcement, European Commission spokesman Olof Gill said the EU was “prepared for whatever might come, and we have been preparing for over a year”.
“We call on the US to immediately revoke the tariffs imposed yesterday, and we want to negotiate to avoid tariffs in the future,” Gill added.
“They bring nothing but lose-lose outcomes, and we want to focus on win-win outcomes.”
US bourbon makers, meanwhile, urged Trump to back off his trade war.
“The US-EU spirits sector is the model for fair and reciprocal trade, having zero-for-zero tariffs since 1997,” Chris Swonger, president and CEO of the Distilled Spirits Council, said in a statement.
“We urge President Trump to secure a spirits agreement with the EU to get us back to zero-for-zero tariffs, which will create US jobs and increase manufacturing and exports for the American hospitality sector. We want toasts not tariffs.”
