Trump Threatens 200% Tariff on EU Alcohol in Escalating Trade War

U.S. President Donald Trump announced on Thursday his intention to impose a 200% tariff on alcoholic beverages from France and other European nations, escalating the ongoing global trade dispute. This move follows the European Union's decision to reinstate an import tax on American whiskey.

Trump's Retaliation

In a statement on Truth Social, President Trump expressed his displeasure with the EU's actions, stating, "The European Union, one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States, has just put a nasty 50% Tariff on Whisky. 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. This will be great for the Wine and Champagne businesses in the U.S."

The president's statement indicates his commitment to protecting American industries from what he perceives as unfair trade practices by European nations.

EU's Countermeasures

On Tuesday, the European Commission announced retaliatory measures against U.S. tariffs on steel and aluminum. These measures include lifting the suspension on previous levies on U.S. goods, including whiskey, and imposing new ones. These changes are scheduled to take effect in April.

"The European Union must act to protect consumers and business. The countermeasures we take today are strong but proportionate," said Ursula von der Leyen, president of the European Commission, on Tuesday.

Escalating Trade Tensions

Commerce Secretary Howard Lutnick revealed that President Trump was "totally annoyed" by the EU's actions, leading to the latest threat of tariffs. He emphasized the imbalance in trade relations, stating, "Their tariffs are way up here, and our tariffs are down here. How about: Relax. Let us balance it," referring to the need for a more equitable trade relationship.

The U.S. plans to announce an additional round of reciprocal tariffs in April, which are expected to impact European countries further.

Impact on Liquor Stocks

The escalating trade war has had a noticeable effect on liquor stocks, both in Europe and the United States. European liquor companies, including LVMH Moet Hennessy Louis Vuitton, Remy Cointreau, and Pernod Ricard, have experienced significant declines in their share prices.

In contrast, American alcohol stocks, such as those of Jack Daniels parent Brown Forman, have also faced downward pressure this week.