US and EU spirits industries call for end to escalating trade war as Donald Trump threatens new tariffs

USA/EUROPE. US President Donald Trump has threatened to impose a 200% tariff on EU alcohol products.

It is the latest escalation in a fast-developing trade war set to have major negative implications for the spirits, wines and duty-free industries.

Trump, via a post on Truth Social (see below), said his administration will impose the hefty tariff on alcohol beverages originating from the EU unless the bloc removes the 50% tariff on US spirits imposed on Wednesday (12 March).

The blow-for-blow tariff moves followed the USA’s imposition of 25% tariffs on EU aluminium and steel which came into effect at midnight on Wednesday.

Reacting, the European Commission made this statement: “In response to the imposition of new, unjustified US tariffs on EU steel and aluminium imports, the Commission has launched swift and proportionate countermeasures on US imports into the EU.

“The Commission regrets the US decision to impose such tariffs, considering them unjustified, disruptive to transatlantic trade, and harmful to businesses and consumers, often resulting in higher prices.”

The EU’s countermeasures includes tariffs on €26 billion (US$28 billion) worth of US goods, a proportion of which would be on American whiskey. As things stand, they will come into effect on 1 April.

However, the European Commission said the EU remains ready to work with the US administration to find a negotiated solution, which would see the countermeasures reversed should such a solution be found.

Trade body spiritsEUROPE – which represents 31 national spirits associations and ten leading spirits companies – made a statement saying it is “deeply alarmed” by the renewed threat of tariffs on EU and US spirits.

It noted that what it describes as “this cycle of tit-for-tat retaliation” affecting the spirits industry is part of the “entirely unrelated dispute on aluminium and steel”.

The statement continued, “We urge both sides to stop using our sector as a bargaining chip in conflicts that have nothing to do with us. Spirits trade exemplifies how open markets create mutual benefits. Reimposing tariffs would be a step backward – hurting businesses, workers and consumers on both sides.

“The EU and USA must de-escalate this dispute now and ensure spirits are never again caught in the crossfire.

“Transatlantic spirits trade has thrived tariff-free since 1997, with brief but damaging disruptions due to past unrelated disputes. Our sector is fully united in its commitment to keeping it that way.

“EU spirits companies have invested heavily in US production, including American whiskey, just as US spirits companies own distilleries across the EU, producing regionally distinctive products tied to local heritage.

“We are each other’s top markets – interwoven by investment, tradition and shared success.”

spiritsEUROPE highlighted that the 1997 reciprocal zero-for-zero agreement that eliminated tariffs on spirits led to a +450% growth in transatlantic trade until 2018, before retaliatory tariffs were first introduced.

In the USA, Distilled Spirits Council President and CEO Chris Swonger made this statement about the reimposition of tariffs on US spirits by the EU: “For the past three years that the EU’s 25% tariff on American whiskey has been suspended in the steel and aluminium dispute, US distillers have worked hard to regain solid footing in our largest export market.

“The EU’s announcement to reimpose these tariffs on American whiskey at 50% on April 1 is deeply disappointing and will severely undercut the successful efforts to rebuild US spirits exports in EU countries.”

Distilled Spirits Council noted that due to the imposition of the EU’s retaliatory tariff in 2018, American whiskey exports to the EU, the largest US market for this spirits segment, plunged -20% to US$440 million between 2018 and 2021.

During the last three years, American whiskey exports to the EU surged nearly +60%, climbing to US$699 million in 2024.

The statement concluded: “Reimposing these debilitating tariffs at a time when the spirits industry continues to face a slowdown in the US marketplace will further curtail growth and negatively impact distillers and farmers in states across the country.

“We urge the US and EU governments to come to a resolution that gets our spirits industry back to zero-for-zero tariffs. This is a model that has allowed spirits exports between the USA and EU to flourish and is in line with President Trump’s vision for fair and reciprocal trade.”