Trump's Threatened 200 Percent Tariffs on European Booze Are His Least Sensible Trade Move Yet
It would make American consumers poorer and hurt American businesses without any promise of benefits.
President Donald Trump's trade war is spilling across the Atlantic, and his latest tariff threats might be the least defensible yet.
In a Thursday morning post on Truth Social, Trump threatened to slap "a 200 percent tariff on all wines, Champagnes, & alcoholic products coming out of France and other E.U. represented countries." That's in retaliation to the European Union's decision earlier this week to place new 50 percent tariffs on American whiskey, bourbon, and a variety of other items including motorcycles and agricultural goods. Those new E.U. tariffs will take effect on April 1—one day before the so-called "reciprocal tariffs" that Trump has threatened to impose on all imports from everywhere around the globe.
"Trump is escalating the trade war he chose to unleash," wrote Laurent Saint-Martin, France's minister for foreign trade, in a Thursday post on X. "We will not give in to threats and will always protect our sectors."
In short: If you enjoy French wine, German beer, champagne, port, or any other uniquely European alcohol products, now might be the time to stock up.
A 200 percent tariff on those imports would be debilitating for the American businesses that sell those products to consumers—a supply chain that includes importers, wholesalers, restaurants, and many other small and mid-sized businesses. And that comes on top of the impact from other tariffs, which are already expected to hit American restaurants with $12 billion in higher costs.
Unsurprisingly, alcohol stocks on both sides of the Atlantic fell sharply on Thursday morning in response to Trump's announcement.
Even compared to other parts of Trump's self-destructive trade war, tariffs on alcohol seem to make little sense. Unlike with tariffs on manufacturing inputs and raw materials, where the Trump administration can at least claim to be protecting or promoting American production by making imports more expensive, that same tradeoff does not exist when it comes to many alcohol products.
There is no American "champagne business," despite what Trump claimed in his Truth Social post, and it is unlikely that American consumers who want to drink French champagne will be satisfied to swill domestic sparkling wine instead. French or Italian wines are valuable because they are distinct from the types of wine that can be produced in the United States. The same is true for German and Belgian beers. They can be duplicated by American producers, but the experience of sipping some Veuve Clicquot or a Chimay cannot be replicated.
If those products become too expensive to compete in the American market, American consumers will have fewer choices and will be poorer for it. The businesses that currently make a buck by shuttling those products across the ocean will lose too. America will not be stronger or better or greater in any way.
Meanwhile, the escalating trade war means that American alcohol producers stand to lose some of their export market to Europe as well. Trade makes everyone better off, and so cutting off trade ensures that everyone loses.
"The U.S. spirits sector supports more than $200 billion in economic activity, 1.7 million jobs across production, distribution, hospitality and retail, and the purchase of 2.8 billion pounds of grains from American farmers," Chris Swonger, CEO of the Distilled Spirits Council of the United States, which represents alcohol producers, said in a statement. "We urge President Trump to secure a spirits agreement with the EU to get us back to zero-for-zero tariffs, which benefits the hospitality industry and U.S. craft distillers who export their products. We want toasts not tariffs."
Trump's willingness to threaten tariffs has, so far, been greater than his willingness to actually impose those higher costs on the American economy. It seems like Europe's leaders are now calling the president's bluff—and people on both sides of the Atlantic should be hoping he once again backs down.
