Trump Warns of 200% Tariff on EU Wine Over Whiskey Dispute

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Key Takeaways

• On March 13, 2025, President Trump announced a 200% tariff on EU alcohol imports, retaliating against the EU’s planned 50% whiskey tariff.
• The EU’s 50% whiskey tariff will take effect on April 1, 2025, potentially reversing U.S. whiskey export growth from $705 million in 2023.
• EU consultations on expanded U.S. product tariffs, including wine and spirits, will conclude by March 26, 2025, escalating trade tensions.

On March 13, 2025, President Donald Trump announced a bold plan to impose a 200% tariff on all wines, champagnes, and other alcoholic drinks imported from countries in the European Union (EU) 🇪🇺. This move was in direct retaliation to the EU’s declaration, made just one day earlier, to reinstate a 50% tariff on American whiskey exports. The EU’s tariff on American whiskey is set to take effect on April 1, 2025. These developments have intensified tensions in the ongoing trade dispute between the two major economies and cast uncertainty over the future of the spirits industry on both sides of the Atlantic.

Trump Warns of 200% Tariff on EU Wine Over Whiskey Dispute

President Trump’s Response to EU Tariffs

President Trump revealed his tariff proposal through a post on his Truth Social account. In his message, he explicitly demanded that the EU abandon its planned 50% tariff on American whiskey or face a steep penalty on their own beverage exports to the United States. He argued that these harsh tariffs could bolster American wine and champagne industries, further hinting that domestic producers might benefit if European imports became less competitive due to higher prices.

The financial markets promptly reacted to this announcement. On March 13, stocks of prominent EU-based beverage companies dropped significantly:

Pernod Ricard, maker of brands like Jameson and Absolut, saw a 3.2% decline in its stock price.
Rémy Cointreau, known for its premium cognacs, faced a 3.8% decrease.
Luxury goods company LVMH, which owns celebrated brands such as Moët Chandon and Veuve Clicquot, experienced a 1.9% dip.

These declines reflect the broader fear that higher tariffs might harm European exporters by making their products less affordable in the U.S. 🇺🇸 market.

The Roots of the Whiskey Tariffs

This recent flare-up in EU-U.S. trade disputes did not emerge overnight but stemmed from years of escalating tensions. The trouble began in June 2018 when the Trump administration first imposed tariffs of 25% on steel and 10% on aluminum imports from the EU, citing national security concerns. In retaliation, the European Union initially placed a 25% tariff on American whiskey exports.

Since then, the tariff dispute has seen a series of suspensions, negotiations, and deadlines:

June 2018 – EU introduces the initial 25% whiskey tariff as retaliation for U.S. tariffs on steel and aluminum.
June 2021 – The EU prepares to increase the whiskey tariff to 50%, though they suspend it to encourage negotiations.
January 2022 – Then-President Joe Biden extends the suspension of the 50% tariff for two years, allowing room for further negotiations.
December 2023 – The suspension is extended one more time but is set to expire on March 31, 2025.

As of April 1, 2025, if no agreements are reached, the EU will reimpose the 50% tariff, doubling the original rate.

Rising Concerns in the American Whiskey Industry

The EU is the most prominent overseas buyer of American whiskey, making this trade dispute a high-stakes issue for U.S. producers. During the years when tariffs were in effect (2018–2021), American whiskey exports to the EU dropped by 20%, falling from $552 million to $440 million, according to data from the Distilled Spirits Council of the United States (DISCUS). After tariffs were paused, exports surged, reaching $705 million in 2023. However, the planned tariff reinstatement threatens to reverse this growth.

Industry leaders in the United States have voiced their growing concerns. Chris Swonger, the president and CEO of DISCUS, explained that the resumed tariffs “would severely undercut the successful efforts to rebuild U.S. spirits exports in EU countries.” He added that American farmers, distillers, and supporting industries would all feel the negative effects, particularly during a period when demand in the domestic market is already slowing.

Meanwhile, SpiritsEurope, a trade group that represents the European spirits industry, echoed similar warnings by calling the planned tariffs “hugely damaging.” They emphasized the impact it would have not only on transatlantic trade but also on businesses and employees involved throughout the supply chains in both regions.

EU’s Broader Plans for U.S. Tariffs

The proposed 50% whiskey tariff might only be the beginning of the EU’s countermeasures. The European Commission has already presented a list of other potential U.S. products that could face higher tariffs in mid-April 2025. These include:

Wine from United States producers.
Gin and liqueurs, which are growing in popularity in European markets.
Calvados (a type of apple brandy).
Fruit-based spirits and cordials.

To gather feedback from stakeholders, the Commission has scheduled consultations on this list to conclude by March 26, 2025. Depending on the outcome, transatlantic trade tensions could widen beyond whiskey and into other key segments of the alcohol market.

The Global Trade Picture

The EU-U.S. dispute is one chapter in a larger story of growing trade tensions worldwide. Tariffs are being applied across several regions, affecting numerous industries:

Mexico and Canada:
President Trump has planned to enforce a sweeping 25% tariff on goods imported from Mexico 🇲🇽 and Canada 🇨🇦 starting April 2, 2025. This would include Mexican Tequila and Canadian whisky.
China:
In March 2025, the tariff rate on Chinese imports was doubled to 20%, representing another escalation in the twirling U.S.–China trade conflict.
Canada’s Response:
Canada reacted to the U.S.’s steel and aluminum tariffs by announcing countermeasures on $20.7 billion worth of American goods. One can only expect further economic ripples from Canada’s actions.

These global skirmishes have led financial analysts to raise the alarm about larger economic consequences, such as a looming recession. Goldman Sachs raised its recession probability forecast to 20%, while Moody’s Analytics increased its estimate to 35%.

Calls for Resolution

Despite the sharp rhetoric, various stakeholders on both sides of the Atlantic have called for calm and productive negotiations. SpiritsEurope and DISCUS have urged their respective governments to aim for tariff-free trade, which has historically allowed spirits exports and imports to thrive. Chris Swonger pointed out that tariff-free trade has often aligned with President Trump’s own views on achieving “fair and reciprocal trade.”

European Commission President Ursula von der Leyen also emphasized her openness to continued dialogue, suggesting there may still be room for compromise before April 1, 2025. However, with both sides standing firm for now, the road to resolution looks uncertain.

What Lies Ahead for the Alcohol Industry

With the April 1 deadline approaching for the EU’s whiskey tariff and President Trump threatening a hefty 200% tariff in retaliation, the spirits industry is bracing for tough times ahead. On the U.S. side, farmers and distillers fear losing their competitive edge in the EU market. Meanwhile, European alcohol producers are nervously watching stock prices dip and anticipating how steeper U.S. import costs may reduce sales.

The dispute carries weight beyond whiskey and wine—it threatens the larger trade relationship between two of the world’s biggest economies. As reported by VisaVerge.com, policymakers on both sides must consider the far-reaching implications of this trade war for industries, workers, and consumers around the globe.

The clock is ticking, and the coming weeks will determine whether this trade dispute escalates further or is resolved through negotiations. Whatever outcome emerges, the resulting effects will likely leave an indelible mark on transatlantic trade and the business of spirits. For now, global markets are holding their breath.

For additional official updates on tariffs, visit the U.S. Office of the United States Trade Representative here.

Learn Today

Tariff → A tax imposed by a government on goods imported into or exported from a country.
Retaliation → A counteraction or response, often a penalty, taken by one party against another following an unfavorable action.
Transatlantic Trade → Economic exchanges, such as imports and exports, occurring between countries on both sides of the Atlantic Ocean.
Countermeasure → An action taken to counter or neutralize another action, often used in trade disputes or conflicts.
Supply Chains → Networks involved in producing, handling, and delivering goods from manufacturers to consumers or businesses.

This Article in a Nutshell

EU-U.S. Whiskey War Escalates

President Trump proposed a 200% tariff on EU alcohol imports after the EU planned a 50% tariff on American whiskey. With exports vital to both economies, this trade clash threatens the spirits industry, raising prices and uncertainty. Resolution is crucial to prevent further economic fallout for producers, consumers, and global markets.