Business

Trump Warns EU of 200% Tariffs on Alcohol in Retaliation to Trade Escalation

President threatens to target French wine, champagne, and other EU alcohol products in response to European duties on US whiskey.

US President Donald Trump has issued a stark warning to the European Union, stating that he will impose a 200% tariff on its alcoholic beverages, including wine and champagne, if the EU follows through with plans to introduce tariffs on US whiskey. Trump’s latest threat, posted on social media, comes after the EU announced it would reintroduce previously suspended tariffs on US goods in retaliation for the imposition of US steel and aluminium duties.

In a post on Truth Social, Trump criticised the EU for what he called “hostile and abusive” tax and tariff policies, accusing the bloc of being designed to exploit the United States. He added that the 50% tariff the EU imposed on US whiskey would prompt his administration to take drastic action, including the 200% tax on European alcohol products, which he claimed would benefit the US wine and champagne industries.

The EU’s retaliatory tariffs are set to target US goods worth €26bn starting on 1 April unless both sides reach an agreement. Trump, who is expected to extend the tariff dispute to all EU exports by 2 April, is escalating his trade war with the bloc, mirroring similar threats against his neighbouring countries, Mexico and Canada.

The markets have responded to the threat, with European stock markets, particularly those of drinks manufacturers, seeing significant declines. For example, Pernod Ricard, a major player in the alcohol industry, saw a drop of more than 3.5% following Trump’s announcement. In the UK, Diageo, the maker of Guinness, saw a small decline of 0.1%.

While the UK has not been directly targeted by Trump’s tariffs beyond the steel and aluminium duties, many of its businesses could be affected by the broader EU-US trade conflict. The EU exports over $11bn in alcoholic drinks to the US annually, with wine making up half of that figure.

Before Trump’s threat, some EU nations, including Spain, France, and Italy, had reportedly lobbied against targeting alcohol in the retaliation, fearing the negative impact on their wine and spirits industries. The Irish Whiskey Association has also expressed concerns, warning that the escalating trade dispute could jeopardise jobs, investments, and businesses within the sector.

As tensions rise, the growing protectionism on both sides of the Atlantic risks damaging global trade relationships, with no clear resolution in sight.

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