US President Donald Trump has escalated the global trade war by threatening a 200% tariff on alcohol from EU countries unless the bloc removes a “nasty 50% tariff on whisky.”
This comes amid rising tensions following the US imposition of 25% tariffs on all steel and aluminium imports, which took effect this week.
The EU has retaliated by announcing levies on up to €26 billion ($28 billion) worth of US goods, including boats, bourbon, and motorbikes, starting April 1.
Tariffs Are a Double-Edged Sword
Tariffs, taxes on imported goods, are central to Trump’s economic strategy, aimed at boosting US manufacturing and protecting jobs.
However, critics argue they will raise prices for American consumers and disrupt global trade.
“Tariffs are taxes. They are bad for business and worse for consumers,” said European Commission President Ursula von der Leyen. “Nobody needs that—on both sides, neither in the European Union nor in the United States.”
Impact on US Alcohol Exports
The US alcohol industry, particularly spirits, could face significant losses if the EU imposes retaliatory tariffs.
In 2023, US spirits exports reached a record $2.2 billion, with whiskey alone accounting for $1.4 billion, according to the Distilled Spirits Council of the United States.
Canada has already implemented tariffs on US bourbon, removing products from store shelves in response to Trump’s import taxes.
Lawson Whiting, CEO of Jack Daniel’s maker Brown-Forman, called Canada’s move a “disproportionate response.”
“That’s worse than a tariff because it’s literally taking your sales away, completely removing our products from the shelves,” Whiting said.
EU’s “Strong but Proportionate” Response
The EU’s retaliatory measures are designed to be “strong but proportionate,” according to von der Leyen.
The bloc remains open to dialogue but warns that tariffs could disrupt economies, threaten jobs, and increase prices on both sides of the Atlantic.
What’s Next in the Trade War?
As the US and EU trade barbs, the global trade war shows no signs of abating. With Trump’s latest threat and the EU’s firm response, businesses and consumers brace for higher costs and economic uncertainty.
