US-Europe trade war escalates: Trump proposes 200% tariffs on alcohol imports to the EU!
US President Donald Trump has threatened to impose a 200% tariff on wine, champagne and other alcoholic beverages imported from the EU. Trump noted that the threat will remain until the EU removes a 50% tariff on US-made whiskey.
"If this tariff is not lifted immediately, the US will soon impose a 200% tariff on all wines, champagnes and alcoholic products coming out of France and other countries represented by the EU," the US president wrote on his "Social Truth" platform on Thursday.
"This will be great for the wine and champagne businesses in the US," he added. European alcohol firms saw their shares fall in response to Trump's threat.
Pernod Ricard shares fell 3.2%, Rémy Cointreau shares fell 3.8%, while LVMH which owns Moët & Chandon and Veuve Clicquot saw its share price fall 1.9%.
Thursday's development follows a long-awaited response from the EU just a day earlier, reacting to Trump's 25% tariffs on steel and aluminum imports.
European Commission President Ursula von der Leyen said the bloc would impose countermeasures on US goods worth up to 26 billion euros.
" We deeply regret this measure ," von der Leyen said in a statement. "Tariffs are taxes, they are bad for business and worse for consumers. They are disrupting supply chains. They bring uncertainty to the economy," she said.
Chris Swonger, CEO of the United States Distilled Beverages Council, responded in a statement on Wednesday: "The EU's announcement to reinstate these tariffs on US whiskey to 50% on April 1 is deeply disappointing and will severely undermine successful efforts to rebuild US spirits exports to EU countries."
Trade in alcoholic beverages between the US and the EU was duty-free from 1997 to 2018, before Washington imposed a 25% tariff on some EU-produced alcohol.
This was sparked by a dispute involving Airbus, when subsidies given by the bloc to European aircraft manufacturers were deemed illegal by the World Trade Organization.
In response to the US tariffs, Brussels then imposed a 25% tariff on American goods, including orange juice, peanut butter and bourbon. In 2021, the US and EU then suspended tariffs related to the Airbus dispute for five years.
US whiskey exports to the EU fell from $552 million to $440 million (€509.1 million to €405.8 million) in the period from 2018 to 2021, a decline of 20%, according to the Distilled Spirits Council.
The group added that exports then increased by nearly 60% from 2021 to 2024, a response to the change in trade policy, reaching $699 million (€644 million).
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