The U.S. president has ignited a fiery trade dispute, announcing a potential 200% tariff on European wines, champagnes, and other alcoholic beverages. This drastic measure hinges on the European Union’s removal of a 50% tariff on American whiskey, setting the stage for a dramatic clash within the global wine and spirits market.

This trade salvo from Donald Trump sends a chilling wave through Europe’s esteemed wine regions. The U.S., a vital market, accounted for a staggering €13.1 billion in EU beverage exports in 2024, according to the International Trade Centre, with wine facing the most severe threat. Of that total, a substantial €5.2 billion came directly from wine, representing nearly 20% of the EU’s total wine exports. This highlights the immense reliance of European vintners on American consumers.

The announcement immediately impacted the stock market, causing shares of major European beverage companies to plummet, while U.S. spirits producers saw a temporary boost. The prospect of dramatically increased prices for iconic European wines, from delicate French champagnes to robust Italian reds, looms large for American consumers, who have long cherished these high-quality imports.

“The European Union, one of the most hostile and abusive taxing and tariffing authorities in the world… has just put a nasty 50% tariff on whisky. 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 declared on Truth Social, underscoring the severity of the situation.

A tangled history of tariffs

The roots of this conflict trace back to 2018, when the EU imposed a 25% tariff on American whiskey in response to U.S. tariffs on European metals. While these whiskey tariffs were temporarily suspended in 2021, the recent U.S. decision to reimpose duties on European steel and aluminum has triggered the EU to reinstate and double its tariff on American whiskey to 50%, effective April 1, 2025. This escalating cycle of retaliatory tariffs now threatens to disrupt the flow of European wines to American tables.

Market reactions

The potential impact of the 200% tariff on wine exports has sent shockwaves through the European alcohol sector. Shares of Davide Campari-Milano, the Italian owner of brands like Aperol, dropped 4.2% by 3:00 p.m. Central European Time. France’s Pernod Ricard, known for brands like Martell Cognac, saw a 3.9% decline. Even luxury giant LVMH, owner of prestigious champagne houses like Mo?t & Chandon, experienced a 1.4% drop. Dutch brewing giant Heineken also slid 0.6%.

In contrast, American distillers like Brown-Forman, the maker of Jack Daniel’s, saw a 2.1% increase, reflecting the expectation that Trump’s pressure might lead to the removal of EU tariffs on American whiskey, potentially reopening European markets for U.S. producers. However, the wine industry remains deeply concerned about the potential for significant losses if the threatened tariffs are implemented, impacting both producers and consumers alike.