Alcohol is emerging as one of the first major casualties of President Trump’s escalating trade war, which took another aggressive turn Thursday when he threatened to impose massive tariffs on European wine and Champagne. While industries like automotive manufacturing have dominated the tariff debate, the alcohol sector is now squarely in the crosshairs—putting billions of dollars in revenue and thousands of jobs at risk.
The latest developments stem from the U.S. imposing 25% tariffs on steel and aluminum imports on Wednesday, a move that prompted swift retaliation from key trading partners, including Canada and the European Union. In response, the EU reinstated previously suspended counter-measures, including a steep 50% tariff on American whiskey set to take effect on April 1. Trump quickly fired back, threatening a 200% tariff on European wine and Champagne unless the whiskey tariffs were dropped. “This will be great for the Wine and Champagne businesses in the U.S.,” he declared on Truth Social.
However, history suggests otherwise. In 2020, the U.S. Wine Trade Alliance pleaded with the Trump administration to suspend a previous round of retaliatory tariffs imposed on EU exports in 2019, arguing they were devastating the hospitality industry. The effects of such trade wars tend to ripple far beyond their intended targets, hurting American businesses that rely on imported goods just as much as foreign producers.
The numbers illustrate the potential economic fallout. The U.S. imports more than $6.7 billion worth of wine annually, with about two-thirds coming from France and Italy, according to the American Association of Wine Economists. Industry leaders are urging the White House to negotiate a fair agreement with the EU rather than escalating tensions. “We urge President Trump to secure a spirits agreement with the EU to get us back to zero-for-zero tariffs, which will create U.S. jobs and increase manufacturing and exports for the American hospitality sector,” the Distilled Spirits Council of the United States said in a statement. Their message: “We want toasts, not tariffs.”
Trump’s approach to trade negotiations has remained consistent—when faced with resistance, he doubles down. Commerce Secretary Howard Lutnick reinforced this idea in an interview with Bloomberg TV, explaining that “If you make him unhappy, he responds unhappy.” The EU is now facing the challenge of deciding whether to back down or escalate further, knowing that Trump is unlikely to yield under pressure.
For American consumers, the consequences could be immediate. If Trump follows through with his 200% tariff threat, imported wine and Champagne could become prohibitively expensive overnight. At a time when economic uncertainty is already weighing on Americans, the last thing many people want is for their favorite bottle of wine to cost three times as much.
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