Trump threatens retaliatory 200% tariff on European wine after EU proposes American whiskey tax
WASHINGTON (AP) — President Donald Trump on Thursday threatened a 200% tariff on European wine, Champagne and spirits if the European Union goes forward with a planned tariff on American whiskey.
The European import tax, which was unveiled in response to steel and aluminum tariffs by the U.S. administration, is expected to go into effect on April 1, just ahead of separate reciprocal tariffs that Trump plans to place on the EU.
But Trump, in a morning social media post, vowed a new escalation in his trade war if the EU goes forward with the planned 50% tax on American whiskey.
“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,” Trump wrote. “This will be great for the Wine and Champagne businesses in the U.S.”
European Commission President Ursula von der Leyen said Thursday that the EU trade commissioner would be having a phone call Friday with his U.S. counterpart.
“We don’t like tariffs because we think tariffs are taxes and they are bad for business and they are bad for consumers," she said. "We have always said at the same time that we will defend our interests. We’ve said it, and we’ve shown it, but at the same time I also want to emphasize that we are open for negotiations.”
The U.S. president has defined his opening weeks in the White House with near daily drama regarding tariffs, saying that taxing imports might cause some economic pain but would eventually lead to more domestic manufacturing and greater respect for America. The S&P 500 stock index fell roughly 1.5% in Thursday afternoon trading, while European alcohol stocks also tumbled.
But with the EU and Trump now tussling over alcohol tariffs, the impact of a trade war could surface directly in ways consumers could quickly see. It's unclear how the import taxes would be absorbed among vintners, distillers, brewers, distributors, retailers and consumers.
Because of Trump's threat, a previously untariffed $15 bottle of Italian Prosecco could possibly increase in price to $45. Similarly, Europe's response to Trump's steel and aluminum tariffs means that the cost of a 30-euro bottle of bourbon in Paris could increase to 45 euros.
Holly Seidewand, owner of First Fill Spirits, a shop in Saratoga Springs, New York, said before Trump threatened the tariffs on European alcohol, the spirits industry was already reeling from layoff announcements in the Kentucky Bourbon sector and the tariffs planned by the EU on American spirits.
“This ongoing tariff war doesn’t just harm importers — it weakens domestic brands, disrupts distributors, and squeezes retailers who rely on global selections,” she said. “In the end, consumers will bear the brunt of it all."
Gabriel Picard, who heads the French Federation of Exporters of Wines and Spirits, said 200% tariffs would be “a hammer blow” for the sector. He said the U.S. market is worth 4 billion euros ($4.3 billion) annually for French exporters of wines and spirits.
“Not a single bottle will continue to be expedited if 200% tariffs are applied to our products. All exports to the United States will come to a total, total, halt,” Picard said in an interview with The Associated Press. “With 200% duties, there is no more market.”
As of now, Europe seems unwilling to back down.
“Trump is escalating the trade war he has chosen,” Laurent Saint-Martin, the French delegate minister for foreign trade, said on X. “France, together with the European Commission and our partners, is determined to fight back. We will not give in to threats and will always protect our industries.”
Trump's latest tariff threats suggested that even companies that have publicly stood by him could be collateral damage, raising questions about whether the wider business community would be willing to openly challenge a series of trade wars that have hurt the stock market and scared consumers who worry about inflation worsening.
Bernard Arnault, the CEO of French luxury goods company LVMH, attended Trump's inauguration in January. His company's wine and spirits brands, which include Moët & Chandon, Krug, Veuve Clicquot and Hennessy, could be subject to the retaliatory tariffs the U.S. president is seeking. The Italy-based Campari Group could also be hurt, after the White House highlighted it at Tuesday's press briefing for possibly opening a U.S. factory.
Still, Trump feels aggrieved by the EU, complaining to reporters on Thursday about the lack of U.S. auto sales there as well as the lawsuits and fines filed against Google and Facebook parent Meta.
“They are suing all of these companies, and they’re taking billions of dollars out of American companies,” Trump said. “And I guess they’re using it to run Europe or something.”
Trump, in announcing the new steel and aluminum tariffs on Wednesday, openly challenged U.S. allies and vowed to take back wealth “stolen” by other countries, and he drew quick retaliation.
He has separate tariffs on Canada, Mexico and China, with plans to also tax imports from the European Union, Brazil and South Korea by charging “reciprocal” rates starting on April 2.
The EU announced its own countermeasures. European Commission President Ursula von der Leyen said that as the United States was “applying tariffs worth 28 billion dollars, we are responding with countermeasures worth 26 billion euros,” or about $28 billion.
Those measures cover not just steel and aluminum products but also textiles, home appliances and agricultural goods.
European Commission spokesman Olof Gill said Thursday shortly before Trump's announcement that the EU was "prepared for whatever might come, and we have been preparing for over a year.”
“We call on the U.S. to immediately revoke the tariffs imposed yesterday, and we want to negotiate to avoid tariffs in the future,” Gill added. "They bring nothing but lose-lose outcomes, and we want to focus on win-win outcomes.”
U.S. whiskey makers, meanwhile, encouraged Trump to broker a deal.
“We urge President Trump to secure a spirits agreement with the EU to get us back to zero-for-zero tariffs, which will create U.S. jobs and increase manufacturing and exports for the American hospitality sector," Chris Swonger, president and CEO of the Distilled Spirits Council, said in a statement.
When Europe responded to Trump's 2018 tariffs with a 25% tax on U.S. whiskey, exports to the EU fell by 20% through 2021, according to the Distilled Spirits Council. Trump's separate 25% tariffs on Canada and Mexico could put 31,000 jobs at risk in the sector.
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AP writers Lorne Cook in Brussels, Samuel Petrequin and John Leicester in Paris, Mae Anderson, Dee-Ann Durbin and Mike Warren contributed reporting.