The latest move by former U.S. President Donald Trump has triggered significant upheaval in the European wine and spirits industry. Trump announced on the Truth Social platform that his administration would impose a 200 percent tariff on European wines, champagnes, and other alcoholic beverages if the European Union does not lift the recently imposed tariffs of 50 percent on American whiskey.
This news has shaken the stocks of leading European alcoholic beverage producers, while American distillers have seen their stock values rise. The United States is one of the most important markets for European alcohol producers, and the introduction of such high tariffs could make many products too expensive for American consumers.
According to data from the International Trade Centre, the U.S. imported alcoholic beverages and related products from the European Union worth 13.1 billion euros in 2024. Wine accounts for the largest share, with an export value of 5.2 billion euros, with the American market covering nearly 20 percent of total wine exports from the EU. The spirits and liqueurs sector is even more sensitive, with exports to the U.S. amounting to 5.1 billion euros, which constitutes 22 percent of total exports from the EU in this category. European brewers are somewhat less exposed to this blow – last year, they exported 1.1 billion euros worth of beer to the U.S., which makes up 12 percent of total beer exports from the EU.
In his announcement, Trump accused the EU of ‘hostile and unfair’ trade practices.
– The European Union, one of the most unfair and aggressive tax and customs authorities in the world, has just imposed an ugly 50 percent tariff on American whiskey. If this tariff is not lifted immediately, the U.S. will soon impose a 200 percent tariff on all wines, champagnes, and alcoholic beverages from France and other EU countries. This will be great for American wine and champagne producers – wrote Trump.
American Metal and European Whiskey
This trade dispute has its roots in past U.S.-European customs battles. The EU imposed a 25 percent tariff on American whiskey in 2018 in response to U.S. tariffs on European metals. This move led to a sharp decline in American whiskey exports to Europe. Although these tariffs were temporarily suspended in 2021, the U.S. recently decided to reintroduce tariffs on European steel and aluminum. In response, the European Union will impose a doubled tariff of 50 percent on American whiskey starting April 1, 2025.
European Stocks Falling, American Stocks Rising
The announcement of new tariffs has caused a drop in the shares of leading European alcoholic beverage producers, while American producers have recorded gains. Shares of Davide Campari-Milano, the Italian company that produces Campari, Aperol, and Wild Turkey, fell by 4.2 percent. Shares of Pernod Ricard, the French giant behind brands like Absolut Vodka, Jameson Irish Whiskey, and Martell Cognac, lost 3.9 percent of their value, while Heineken recorded a smaller decline of 0.6 percent, and shares of LVMH, the luxury group that owns Moët & Chandon and Hennessy, fell by 1.4 percent.
On the other hand, American distillers have benefited. Shares of Brown-Forman, the producer of Jack Daniel’s, rose by 2.1 percent, reflecting expectations that Trump’s pressure could force the EU to lift tariffs on American whiskey, thereby reopening the European market to American producers. This trade conflict threatens further disruptions in the markets and increased prices for consumers. If the 200 percent tariffs are indeed implemented, the European alcohol industry could lose a key part of its export market, while American producers could profit – at least until the EU responds with its own countermeasures. Given the history of escalating trade conflicts between the U.S. and the EU, this could be just the beginning of a new round of economic competition.
