What do Kentucky bourbon, champagne, and Chianti wine have in common? They’re all caught in the crosshairs of a global tariff war.
Driving the news: After the Trump administration put a 25% tariff on steel and aluminum this week, EU officials proposed responding with a 50% tariff on U.S. whiskey. Now, the U.S. is doubling down by threatening to put a 200% tariff on European alcohol.
- The results would be devastating. The EU accounted for ~40% of all U.S. spirits exports in 2023, while 31% of all European wine and spirits are sent to the U.S.
- Of the US$6.7 billion worth of wine that the U.S. imports every year, about two-thirds of it comes just from France and Italy.
Why it matters: Alcohol is also at the centre of an escalating trade war between the U.S. and Canada. Some provinces pulled U.S. booze from shelves, which the maker of Jack Daniel’s said is “worse than a tariff” and a “very disproportionate response” to U.S. levies.
Bottom line: Retaliatory measures will disrupt supply chains, increase costs, and limit product availability. This may boost Canada’s domestic alcohol industry but could also reduce consumer choices, strain U.S.-Canada trade relations, and impact pricing.—LA