Trump threatens 200% wine tariffs as trade war with Europe shifts to alcohol
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Alcohol appears to be one of the earliest casualties of President Trump's trade war, one he escalated Thursday with a threat to impose massive levies on European wine and Champagne.
Why it matters: The alcohol industries may not have had the same influence in the tariff fight so far as automakers, but there's still billions of dollars in revenue and thousands of jobs at stake.
Driving the news: On Wednesday the U.S. imposed 25% tariffs on steel and aluminum, prompting retaliation from top trading partners like Canada and the European Union.
- The EU quickly reimposed previously suspended counter-measures, including 50% tariffs on American whiskey as of April 1.
- On Thursday, Trump responded, threatening a 200% tariff on European wine and Champagne if the whiskey levy wasn't removed.
- "This will be great for the Wine and Champagne businesses in the U.S.," Trump posted on Truth Social.
Yes, but: Historically, it's not.
- In 2020 the U.S. Wine Trade Alliance begged Trump to suspend a previous set of retaliatory tariffs on EU exports that had been imposed in 2019, citing their significant impact on the hospitality industries.
By the numbers: The U.S. imports more than $6.7 billion worth of wine a year, per the American Association of Wine Economists, with about two-thirds of that coming from France and Italy.
What they're saying: "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," the Distilled Spirits Council of the United States said in a statement.
- "We want toasts not tariffs."
💭 Thought bubble, from Axios economics reporter Courtenay Brown: The EU is quickly learning the risk of trying to hit Trump where it hurts, like red-state industries.
- He doesn't back down, he doubles down. "If you make him unhappy, he responds unhappy," as Commerce Secretary Howard Lutnick told Bloomberg TV Thursday.
The bottom line: To paraphrase FDR, what America needs now is a drink — but not if it costs 200% more.
