TLDR
- Trump threatens 200% tariff on European wines and spirits in response to EU’s 50% tariff on American whiskey
- Steel and aluminum tariffs of 25% on imports from all countries went into effect March 12, 2025
- EU announced counter-tariffs on $28 billion in US goods starting in April
- Trump paused tariffs on Canada and Mexico for USMCA-compliant goods until April 2
- European alcohol stocks including LVMH, Remy Cointreau, and Pernod Ricard have fallen significantly since the tariff threats
President Donald Trump has threatened to impose a 200% tariff on European wines, champagnes, and other alcoholic products. This threat comes as a direct response to the European Union’s 50% tariff on American whiskey imports.
The escalation marks the latest development in growing trade tensions between the United States and its global trading partners. Trump made the announcement on Thursday via his Truth Social platform.
“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,” Trump wrote. He added that this move “will be great for the Wine and Champagne businesses in the U.S.”
The EU’s tariff on American whiskey is part of a broader response to Trump’s steel and aluminum tariffs. The European Commission announced on Tuesday that it was retaliating against these U.S. tariffs.
“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. The EU plans counter-tariffs on $28 billion in US goods starting in April.
Trump’s 25% tariff on imports of steel and aluminum from all countries took effect on Wednesday, March 12. These tariffs are reshaping U.S. trade policy after decades of free-trade agreements.
The impact of these trade tensions has already hit European alcohol stocks. LVMH Moet Hennessy Louis Vuitton, the largest luxury brand company in the world, saw its shares fall for a ninth consecutive day on Thursday.
LVMH has dropped 14% since the end of February. The company is headed by Bernard Arnault, who is the richest man in Europe.
Other European alcohol stocks have also suffered. Remy Cointreau eased for a third day, bringing its loss to almost 11% in that stretch. Pernod Ricard weakened for a third day and is down more than 6% since Monday’s close.
American alcohol companies have not been spared from the trade war’s effects. Shares of Jack Daniels parent Brown Forman have fallen more than 7% this week.
Trade tensions extend beyond Europe
The trade tensions extend beyond Europe. Trump has enacted new blanket tariffs of around 20% on Chinese goods. These come on top of existing 10% duties that went into place during Trump’s first term.
China has responded with duties of up to 15% on US farm goods. These include chicken and pork, which started on Monday, March 10.
Trump’s trade policy has also affected relations with Canada and Mexico. His 25% across-the-board tariffs on these US neighbors went into effect on Tuesday, March 4.
Just two days later, Trump confirmed the US would pause tariffs on goods and services compliant with the United States-Mexico-Canada Agreement (USMCA). This pause will last until April 2.
Canada retaliates with new duties on $20 billion of US goods
Canada has retaliated to the steel and aluminum tariffs with new duties on about $20 billion of US goods. Trump had threatened to raise the steel tariff to 50% for Canadian imports of the metals.
He reconsidered after Canada suspended a new tax on US-bound electricity. The countries have made plans for new trade talks.
Trump has also signed a measure that could lead to reciprocal tariffs on US trading partners. This could happen as soon as April 2, aiming to fulfill a campaign promise and raise revenue.
The escalating trade tensions come as Republicans prepare a tax and spending bill. The new tariffs could potentially provide additional revenue for these plans.
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