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Donald Trump has once again made headlines with his latest threat of a 200 per cent retaliatory tariff on alcohol imports from the EU. This move comes in response to the EU’s decision to impose a 50 per cent tariff on US whiskey. In a post on his Truth Social platform, the former US president stated, “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.”
The EU’s decision to impose tariffs on whiskey exports from the US is a retaliatory measure against Washington’s levies on steel and aluminium imports. If implemented, these tariffs would have a significant impact on the European alcohol industry, affecting companies like France’s LVMH, known for producing Dom PĂ©rignon and MoĂ«t & Chandon champagne. Following Trump’s announcement, shares of drinks companies such as Pernod Ricard and LVMH experienced a decline.
Since taking office, Trump has been engaged in an escalating trade war with the US’s major trading partners, imposing tariffs that have caused uncertainty in the business world and financial markets. This latest exchange of threats between Trump and the EU mirrors a similar dispute from his first term, when Brussels imposed tariffs on American whiskey in response to US levies on metals.
The potential tariffs on EU alcohol exports to the US would have a significant economic impact, with industry executives expressing concern about being caught in the crossfire of another trade dispute. Pauline Bastidon, trade and economic affairs director at spiritsEurope, stated, “Yet again, spirit drinks have become collateral damage in an unrelated trade dispute.” Companies like Brown-Forman and Beam Suntory would be among the hardest hit by these tariffs, with Brown-Forman potentially seeing a 10 per cent decrease in group operating income.
Chris Swonger, president of the Distilled Spirits Council, called for President Trump to secure a spirits agreement with the EU to eliminate tariffs. In addition to tariffs on whiskey, the EU has announced duties on €28bn worth of US goods, including jeans and Harley-Davidson motorbikes. EU officials have targeted products from Republican states in an effort to garner opposition to Trump’s tariffs among lawmakers.
The ongoing trade tensions between the US and the EU highlight the challenges of international trade relations and the potential impact on various industries. As the situation continues to evolve, it is crucial for businesses to stay informed and adapt to changing trade policies. Subscribe to the White House Watch newsletter for updates on the 2024 US election and its implications for Washington and the world.
