Trump threatens 200% tariff on European wine and champagne

President Donald Trump has reignited trade tensions with the European Union, threatening to impose a 200% tariff on European wine, champagne, and other alcoholic beverages. His announcement follows the E.U.'s decision to levy a 50% tariff on U.S. whiskey and other American goods in response to newly enacted U.S. tariffs on steel, aluminum, and related products.

In a social media post on Thursday, Trump criticized the E.U. as "hostile and abusive," demanding an immediate reversal of its tariff plan. "If this tariff is not removed immediately, the U.S. will shortly place a 200% tariff on all wines, Champagnes, and alcoholic products coming out of France and other E.U. represented countries," he declared.

Escalating Trade Tensions

The E.U.’s retaliatory measures, announced earlier this week, target U.S. products in two phases. The first wave, effective April 1, includes a 50% tariff on iconic American brands such as Harley-Davidson motorcycles and Kentucky bourbon. A second set of tariffs, scheduled for mid-April, will focus on agricultural and industrial goods from politically significant Republican districts.

European leaders have expressed a preference for diplomatic negotiations rather than escalating tariffs. "Tariffs are taxes," Ursula von der Leyen, President of the European Commission, stated on Wednesday. However, with no progress on trade talks, the E.U. opted to strike back in a way that could pressure Washington into negotiations.

European Response: No Backing Down

Some European officials remain steadfast in their stance. "We will not give in to threats," Laurent Saint-Martin, France’s foreign trade minister, wrote on X. He accused Trump of escalating the trade war unnecessarily and insisted that France and the E.U. would stand firm.

Olof Gill, a spokesperson for the European Commission, confirmed that Trade Commissioner Maros Sefcovic was reaching out to U.S. counterparts to address the situation. "Calls are being prepared," he noted.

Impact on the Alcohol Industry

The alcohol industry is once again caught in the crossfire of a U.S.-E.U. trade war. During Trump’s first term, tariffs were imposed on liquor and other spirits, causing long-lasting disruptions. While Trump previously threatened to tax French champagne, he never followed through.

This time, industry leaders on both sides of the Atlantic are raising concerns. Executives from major alcohol brands are actively lobbying in Washington, Brussels, and other capitals, warning that such tariffs could lead to job losses and significant economic repercussions.

Notably, Bernard Arnault, CEO of LVMH Moët Hennessy Louis Vuitton and France’s richest man, has long-standing ties with Trump. His company, which owns luxury brands such as Dom Pérignon, Krug, and Veuve Clicquot, would be directly impacted by the proposed tariffs.

As tensions mount, both U.S. and E.U. businesses await further developments, hoping for a resolution that avoids further economic damage.