On Thursday morning, President Donald Trump announced that he is planning to impose a 200 percent tariff on European countries’ alcoholic products sold to the U.S., responding to a much smaller tariff imposed by the European Union (EU) that was itself was in response to tariffs by Trump earlier this month.
The EU announced on Wednesday that it would place a tariff on U.S.-made whiskey, describing it as a “countermeasure” to Trump’s global tariffs on steel and aluminum. Ursula von der Leyen, president of the European Commission, called the reaction a “strong but proportionate” one.
Trump’s response to the EU’s latest action was arguably less proportional. In a rant on his Truth Social account the next morning, Trump described the EU as being “hostile” and abusive toward the U.S., calling the retaliatory tariff a “nasty” action.
“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 said.
Despite Trump claiming the tariff would be good for alcohol producers in the U.S., the National Association of American Wineries has said that it opposes the idea of tariffs in general, including those imposed on foreign countries.
Tariffs “ultimately hurt everyone from grape growers to wineries and consumers in a variety of ways,” a statement from the trade group said.
The National Restaurant Association, the National Retail Federation and the American Beverage Licensees also oppose tariffs like the one Trump is threatening.
European leaders responded to Trump’s announcement by blaming him for escalating tensions on trade.
“Trump is escalating the trade war he chose to unleash. France remains determined to respond with the European Commission and our partners,” read a statement from France’s junior trade minister Laurent Saint-Martin.
“We’re not surprised, but 200 percent … that we didn’t expect,” said Ignacio Sánchez-Recarte, head of the European Committee of Wine Companies, speaking to Politico about the matter.
American voters by and large recognize that tariffs will lead to increases in consumer prices. Indeed, in an Economist/YouGov poll published on Wednesday, 7 in 10 Americans rightly recognized that tariffs will make their purchases more expensive.
When Trump imposed tariffs during his first term, prices did increase — one study found that consumer costs went up $1.4 billion per month that tariffs were in place, for example.
Tariffs are taxes on goods entering the country. Rather than being paid for by the country they’re targeting or the companies themselves, however, they are essentially paid for by consumers, as companies raise prices on their goods because of them. For this reason, some economists recognize tariffs as being a tax on consumers.
Earlier this week, White House Press Secretary Karoline Leavitt baselessly suggested that tariffs were actually a benefit for consumers. When asked by Associated Press reporter Josh Boak why Trump was enacting “tax hikes in the form of tariffs,” Leavitt denied that Americans would pay the price of the tariffs.
“Tariffs are a tax cut for the American people, and the president is a staunch advocate of tax cuts,” she said, providing no evidence for her claim.
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