Trump's tariffs make you wanna drink—too bad it'll cost more
Celebrations could get a whole lot more expensive for Americans, after President Donald Trump threatened on Thursday to levy a 200% tariff on all alcohol imported from the European Union.
"The European Union, one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States, has just put a nasty 50% Tariff on Whisky. If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES," Trump wrote in a post on Truth Social. "This will be great for the Wine and Champagne businesses in the U.S."
If such tariffs go into place, it will be extremely costly for Americans, as half of all wine and spirits in the United States are imported from the EU, according to the United States Department of Agriculture. (Additionally, there is no “Champagne business” in the U.S. as it is only made in a particular region of France.)
“Most wine imports come from the European Union (EU), accounting for 75 percent of the total value and 50 percent of the volume,” the USDA said in a 2022 report about wine imports. “Specifically, the top two countries of origin, Italy and France, each supplied about $2.5 billion in wine imports in FY 2021.”
Trump's tariff threat was his response to the EU putting tariffs on €26 billion worth of goods the bloc imports from the U.S.—including bourbon. And those tariffs were in response to the 25% tariff Trump put on steel and aluminum imports into the United States.
The new trade spat is evidence of just how fast Trump's tariff policy could spiral out of control for Americans. Tariffs are essentially a tax on Americans, as the companies who import the goods pass the cost of the duties down to consumers.
Ursula von der Leyen, president of the European Commission, said in a news release that the new round of tariffs the EU is placing on American goods are an unfortunate but necessary response to Trump’s trade policy.
"Tariffs are taxes. They are bad for business, and even worse for consumers. These tariffs are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices will go up in Europe and in the United States. The European Union must act to protect consumers and business,” von der Leyen said. “The countermeasures we take today are strong but proportionate."
Kentucky Democratic Rep. Morgan McGarvey said in an appearance on CNN that the EU's tariffs will be devastating for his state's bourbon industry.
"During Trump's first presidency, when there was a 15% retaliatory tariff put on by the EU, it cut our exports in half," McGarvey said, adding that bourbon tariffs negatively impacted jobs in his state. "It was hundreds of millions of dollars to the bourbon industry. Now they're talking about 50% tariffs on the bourbon industry."
The ratcheting up of yet another trade war caused the Dow Jones Industrial Average to take a tumble on Thursday. As of 12:25 PM Eastern, the Dow fell another 477 points. In total, the Dow has fallen more than 8% over the last month, wiping out trillions in Americans' investments and retirement accounts.
But Trump and his advisers are saying they don't care about the impact Trump's stupid trade policy has had on the markets. Asked on March 6 what he thought of the stock market decline, Trump fluffed it off, saying, “I think it's globalists that see how rich our country's gonna be and they don't like it.”
Treasury Secretary Scott Bessent also downplayed the stock market slide in a Thursday appearance on CNBC.
"It's another sort of turbulent day here. The volatility has really picked up. We're down another 3.5% for the week, almost 10% from the recent highs. I know that you guys have brushed this off, but I do wonder if you're starting to get concerned now that these losses are picking up?" CNBC host Sara Eisen asked Bessent.
To which Bessent replied: "What we're focused on is the real economy. Can we create an environment where there are long-term gains for the American market and long-term gains for the American people? I think having been in the markets for 35 years I know the market is prone to big unwinds like this."
Ultimately, this is the second time in a week Trump's ridiculous trade policy has sent the stock market in a downward spiral. On Tuesday, Trump's threat to place even more tariffs on Canada led to a 1.1% drop in the Dow and a 0.8% drop in the S&P 500.
Trump's disastrous trade policy even has some Republicans distancing themselves from Dear Leader.
"The stock market is comprised of millions of people who are simultaneously trading. The market indexes are a distillation of sentiment. When the markets tumble like this in response to tariffs, it pays to listen," Kentucky GOP Sen. Rand Paul wrote in a post on X.