Because of Trump’s threat, a previously non-tariffed $15 ($24) bottle of Italian prosecco could possibly increase in price to $45 ($72). Similarly, Europe’s response to Trump’s steel and aluminium tariffs means that the cost of a €30 ($52) bottle of bourbon in Paris could increase to €45 ($78).
New York bottle shop owner Holly Seidewand said before Trump threatened the tariffs on European alcohol, the spirits industry was already reeling from layoff announcements in the Kentucky Bourbon sector and tariffs planned by the EU on American spirits.
Workers load barrels of bourbon on to a truck at The Jim Beam Distillery in Kentucky in 2020.Credit: Getty Images
“This ongoing tariff war doesn’t just harm importers – it weakens domestic brands, disrupts distributors, and squeezes retailers who rely on global selections,” she said. “In the end, consumers will bear the brunt of it all.”
Gabriel Picard, who heads the French Federation of Exporters of Wines and Spirits, said 200 per cent tariffs would be “a hammer blow” for the sector. He said the US market was worth €4 billion annually for French exporters of wines and spirits.
“Not a single bottle will continue to be expedited if 200 per cent tariffs are applied to our products. All exports to the United States will come to a total, total, halt,” Picard said. “With 200 per cent duties, there is no more market.”
As of now, Europe seems unwilling to back down.
Donald Trump and daughter Ivanka with Bernard Arnault (centre) at a Louis Vuitton workshop in Texas in 2019.Credit: AP
“Trump is escalating the trade war he has chosen,” French delegate minister for foreign trade Laurent Saint-Martin said on X. “France, together with the European Commission and our partners, is determined to fight back. We will not give in to threats and will always protect our industries.”
Trump’s latest tariff threats suggested that even companies that have publicly stood by him could be collateral damage, raising questions about whether the wider business community would be willing to openly challenge a series of trade wars that have hurt the stock market and scared consumers who worry about inflation worsening.
Bernard Arnault, chief executive of French luxury goods company LVMH, attended Trump’s inauguration in January. His company’s wine and spirits brands, which include Moet & Chandon, Krug, Veuve Clicquot and Hennessy, could be subject to the retaliatory tariffs Trump is seeking.
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The Italy-based Campari Group could also be hurt, after the White House highlighted it at Tuesday’s press briefing for possibly opening a US factory.
Still, Trump feels aggrieved by the EU, complaining to reporters on Thursday about the lack of US car sales there as well as the lawsuits and fines filed against Google and Facebook parent Meta.
“They are suing all of these companies, and they’re taking billions of dollars out of American companies,” Trump said. “And I guess they’re using it to run Europe or something.”
Trump, in announcing the new steel and aluminium tariffs on Wednesday, openly challenged US allies and vowed to take back wealth “stolen” by other countries, and he drew quick retaliation.
He has separate tariffs on Canada, Mexico and China, with plans to also tax imports from the European Union, Brazil and South Korea by charging “reciprocal” rates starting on April 2.
The EU announced its own countermeasures – tariffs worth €26 billion that cover not just steel and aluminium products but also textiles, home appliances and agricultural goods.
US whiskey makers, meanwhile, encouraged Trump to broker a deal.
“We urge President Trump to secure a spirits agreement with the EU to get us back to zero-for-zero tariffs, which will create US jobs and increase manufacturing and exports for the American hospitality sector,” Distilled Spirits Council chief executive Chris Swonger said.
When Europe responded to Trump’s 2018 tariffs with a 25 per cent tax on US whiskey, exports to the EU fell by 20 per cent in 2021, according to the council. Trump’s separate 25 per cent tariffs on Canada and Mexico could put 31,000 jobs at risk in the sector.
AP
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