Unlock the White House Watch newsletter for free
Your guide to what the 2024 US election means for Washington and the world
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 Pernod Ricard down 2.9 per cent and LVMH falling 1.7 per cent.
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.
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, EU alcohol exports to the US tumbled 20 per cent to $440mn between 2018 and 2021, when the tariffs were lifted. The value of alcohol exports to the US 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.
US-based Brown-Forman, whose brands include Jack Daniel’s and Old Forester, as well as 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.”
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.
