US-EU trade war heats up: Trump threatens 200 percent tariffs on EU alcohol

Trump's new threat of tariffs could have a serious ripple effect felt throughout the entire global drinks market. Credit: Chip Somodevilla / Shutterstock.com

The US-EU trade battle is intensifying as US President Donald Trump has threatened a 200 percent tariff on all European wines, champagnes and alcoholic products unless the EU scraps its planned 50 percent tax on American whiskey.

The warning, issued via Trump’s account on the social media platform Truth Social, is the latest escalation in a transatlantic dispute over tariffs that could have serious consequences for the food and beverage industry.

Trump’s warning to the EU

In his statement, Trump accused the European Union of being “one of the most hostile and abusive taxing and tariffing authorities in the World,” claiming it was formed “for the sole purpose of taking advantage of the United States.”

The post continued:

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 E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.”

The proposed tariff hike would be a devastating blow to European wine and spirits exporters, with the US being a key market. According to EU statistics agency Eurostat, last year alone, EU nations exported €4.9 billion worth of wine to the US, representing 29 percent of total EU wine exports. France and Italy account for the vast majority, making them particularly vulnerable to the potential levies.

Industry impact and market reactions

Since Trump’s announcement earlier today, US stock futures have slipped, and shares of European spirits companies have fallen. Pernod Ricard stock was down 3.2 percent, while LVMH, which owns Moët & Chandon, saw its share price fall 1.9 percent. A prolonged tariff war could disrupt supply chains, increase costs for US and EU importers, and potentially lead to higher prices for consumers.

This news is the latest in a series of proposed tariffs by Trump following his announcement earlier this month of a proposed 25 percent tariff on products entering the US from Mexico and Canada.

The European Commission responded yesterday (Wednesday, April 12) to the recent proposed US tariffs on EU steel and aluminium imports by confirming that it will end its current suspension of tariffs on US goods on April 1 and that its new countermeasure tariffs on US goods worth 26 billion euros ($28 billion) will be fully in place by April 13.

New Food approached the European Commission for comment in response to Trump’s latest social media post.

Olof Gill, EU Commission spokesperson for trade, said:

We have no new comment on the statement by President Trump. But we can confirm that Commissioner Šefčovič reached out to his American counterparts immediately after the announcements yesterday, and calls are being prepared.”

With tensions rising, industry professionals on both sides of the Atlantic are watching closely. If Trump follows through with his EU alcohol tariffs, the ripple effect could be felt throughout the entire global drinks market.