Trump escalates trade war with 200% tariff on European alcohol

• Published On: 14 March 2025 at 19:04

President Donald Trump has threatened to impose a sweeping 200% tariff on European alcoholic beverages in response to the European Union's retaliatory tariffs on US steel and aluminium.

The escalating trade war heated up after the EU announced a 50% tariff on American spirits, which is set to take effect on April 1. The move came shortly after the United States imposed a 25% tariff on steel and aluminium imports. In a fiery post on Truth Social, Trump declared that unless the EU withdraws its tariff, the United States would retaliate with steep tariffs on wines, champagnes, and other alcoholic imports from France and other EU countries.

"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," Mr. Trump wrote. "This will be great for the Wine and Champagne businesses in the U.S."

The EU quickly condemned the US tariffs as "unjustified" and responded with countermeasures aimed at €26 billion ($28 billion) worth of American goods, including bourbon, motorcycles, and boats. French Trade Minister Laurent Saint-Martin slammed Trump for "escalating the trade war he has chosen to start" and promised to "fight back."

"We will not give in to threats and will always protect our industries," Saint-Martin said in a statement on X (formerly Twitter).

Olof Gill, an EU Commission spokesperson, urged the US to lift the steel and aluminium tariffs. "We want to negotiate, to avoid tariffs in the future," he informed me. "They bring nothing but lose-lose outcomes."

The alcohol industry is bracing for consequences. In 2023, France exported nearly 27 million bottles of champagne to the United States, which was its largest market. The Irish Whisky Association has warned that tariffs "put jobs, investments, and businesses at risk and have the potential to be devastating."

"There is no winner in a trade war," the association declared, emphasising that the United States remains its largest market.

According to the Distilled Spirits Council, after the EU responded to Trump's 2018 tariffs with a 25% levy on U.S. whisky, American exports to Europe fell by 20% by 2021. Trump's additional 25% tariffs on Canada and Mexico could jeopardise more than 31,000 jobs in the sector.