Trump Threatens EU with 200% Tariffs on Wine and Champagne amid Trade War Escalation

By Evans Momodu
Published 15:01 UK GMT

Donald Trump Warns of Heavy Tariffs on European Alcoholic Drinks

U.S. President Donald Trump has issued a strong warning to the European Union (EU), threatening to impose 200% tariffs on European wine, champagne, and other alcoholic beverages if the bloc moves forward with duties on American whiskey.

The statement, made via Truth Social, follows Trump's long-standing criticism of the EU, which he has previously accused of unfair trade practices. His latest move is in response to the European Commission's decision to reinstate tariffs on U.S. steel and aluminum imports, potentially igniting a new round of the US-EU trade war.

Trump stated:

“The European Union, one of the most hostile and abusive taxing and tariffing authorities in the world, was created solely to take advantage of the United States. They have now slapped a harsh 50% tariff on American whiskey.”

“If this tariff is not removed immediately, the United States will impose a 200% tariff on all wines, champagnes, and alcoholic beverages exported from France and other EU nations.”

“This will be great news for American wine and champagne producers.”

Retaliatory Measures: EU Targets $26 Billion in US Goods

The European Commission has announced plans to reimpose previously suspended tariffs on American products, affecting €26 billion worth of U.S. goods from April 1, 2025. Unless a last-minute deal is reached, the EU will take action to counter the U.S. tariffs on steel and aluminum imports that came into effect this week.

Trump is also expected to extend tariff measures beyond the EU, with potential new restrictions on Mexico and Canada, further escalating global trade tensions.

The stock market responded swiftly to the trade war escalation. Shares of major European beverage companies fell sharply, with Pernod Ricard experiencing a 3.5% drop on the CAC 40 in Paris. Meanwhile, Diageo, which owns brands like Guinness, saw smaller declines on the FTSE 100.

How Trump’s Tariffs Could Impact the UK and Global Alcohol Market

While the United Kingdom has not yet been directly threatened with alcohol tariffs, its trade relationship with both the EU and the U.S. makes it vulnerable to the dispute. According to United Nations trade data, the EU exports more than $11 billion worth of alcoholic beverages to the United States annually, with wine making up nearly half of that total.

The Irish Whiskey Association has warned of severe consequences if tariffs continue to escalate:

"There is no winner in a trade war. The imposition of tariffs will impact our businesses and consumers. Being caught in this dispute places jobs, investments, and businesses at risk. This could be devastating for the Irish whiskey industry."

Key Takeaways on the US-EU Trade Dispute over Alcohol Tariffs

• Donald Trump has threatened a 200% tariff on European wine, champagne, and alcoholic beverages if the EU maintains its 50% duty on American whiskey.
• The European Commission plans to retaliate against U.S. steel and aluminum tariffs, targeting $26 billion in American goods.
• Financial markets reacted negatively, with alcohol stocks dropping significantly.
• The Irish whiskey industry and other European alcohol producers are at risk of significant revenue losses.
• The UK, though not directly targeted, could face economic consequences due to its role in EU and U.S. trade relations.

With April 1, 2025, fast approaching, tensions between the United States and the European Union continue to rise. If no trade agreement is reached, global markets could face a new wave of economic uncertainty.
Source: Sky news