Volkswacht Bodensee - Trump tariff threat leaves sour taste for European drinks producers

Trump turned his favoured tariff weapon on EU wines and spirits in response to the bloc's planned 50 percent levy on American whiskey.

The United States is the number one market for European alcohol and these are the stakes for its different sectors:

- Wine -

Vineyards in the EU sent about $3.5 billion dollars of wine to the United States in 2023, according to the WTO, soaking up about one third of their exports. French wine accounted for about $2.6 billion of Europe's total in 2024, French customs figures show.

At the moment wine exports face a 0.8 percent US tariff, according to the WTO.

This currently adds barely 10 US cents to the cost of an average bottle, according to the French Wines and Spirits Exporters' Federation (FEVS). "Business stops" with a 200 percent tariff, said federation managing director Nicolas Ozanam.

- Sparkling wine -

EU sparkling wine exports to the United States reached $1.6 billion in 2023, the WTO said. Some 26.9 million bottles of champagne worth about 810 million euros ($880 million) went to US drinkers last year, the French champagne producers' association said.

The Taittinger company slammed the "political game" that has taken "hostage" champagne and other spirits.

EU sparkling wine currently enters the United States with a two percent tariff, according to the WTO.

Some champagne brands could rise from $60 to $180 a bottle, according to Taittinger company president Vitalie Taittinger. "The price risks becoming unaffordable for the American consumer," she added.

- Beer -

Almost $1 billion of beer went from EU countries to the United States in 2023, according to the WTO, about 40 percent of their exports. The trade is currently duty free.

The Netherlands, home of Heineken, is the second biggest foreign beer supplier for the United States, sending 416 million litres in 2024, according to US commerce department figures reported by the US Beer Institute. Mexico is the main supplier.

- Irish whiskey -

Irish whiskey exports to the United States were worth $135 million in 2024, the Irish Whiskey Association said.

"There is no winner in a trade war," said association director Eoin O Cathain. "Having our sector implicated in this dispute puts jobs, investments and businesses at risk and has the potential to be devastating for Irish Whiskey."

Ireland's Prime Minister Micheal Martin, who was at the White House on Wednesday, said: "One would hope that this would settle in time, but the uncertainty does create difficulties for business, does create difficulties for investment decisions, and that certainly is challenging."

- Vodka -

Several major vodka brands such as Sweden's Absolut, made-in-France Grey Goose and Poland's Belvedere rely heavily on the US market.

A 1997 transatlantic accord eliminated duties on European spirits. According to the Spirits Europe trade group, two-way trade had increased 450 percent by 2018 when Trump's last administration launched an earlier trade showdown.

European producers sent more than $1 billion of vodka to the United States in 2024 with French firms accounting for $466 million, Dutch makers $325 million, Sweden $148 million and Poland $64 million, according to the Distilled Spirits Council.

Spirits Europe said it was "deeply alarmed" by the US threat and called on Washington and Brussels to end the "cycle of tit-for-tat retaliation" and "stop using our sector as a bargaining chip in conflicts that have nothing to do with us".

"EU spirits companies have invested heavily in US production, including American whiskey, just as US spirits companies own distilleries across the EU," it said.

- Cognac -

The cognac sector accounts for about 70,000 jobs in France, according to the BNIC industry association. France exported about $1.1 billion of cognac to the United States last year, according to the Distilled Spirits Council of the United States.

The luxury spirit has already been hit by China's launch of an anti-dumping investigation into EU alcohols as part of a separate dispute. Cognac sales to China, Hong Kong and Singapore have since fallen 25 percent, according to industry figures.

P.Vogel--VB