European Union Joins Trade War

The European Union has responded to U.S. President Donald Trump’s new 25% tariffs on steel and aluminum imports by re-imposing its tariffs on American-made whiskies. The tariffs had been suspended since 2021, but will now take effect at 50% starting April 1. As a reminder, tariffs are taxes paid by a company importing goods from abroad, and are not paid by the exporting company or its government.

That’s likely to have a major impact on U.S. whiskey exports, since EU member nations make up some of the largest export markets for American whiskey. During the three years the original 25% tariff was in effect, U.S. whiskey exports to the 27-member trading bloc fell by 20% from $552 million in 2018 to $440 million in 2021. Since the suspension of the European tariffs in 2021, American whiskey exports to Europe have grown by 60% to $699 million last year.

Distilled Spirits Council CEO Chris Swonger called the reimposition of tariffs “deeply disappointing.” In a statement, he said “reimposing these debilitating tariffs at a time when the spirits industry continues to face a slowdown in U.S. marketplace will further curtail growth and negatively impact distillers and farmers in states across the country.”

United States Trade Representative Jamieson Greer blasted the European move. In a statement, Ambassador Greer accused the EU of wanting to block American efforts at reindustrializing.

“The EU has rejected attempts under successive U.S. administrations to cooperate effectively on dealing with global excess capacity on steel, aluminum, and other sectors, employing measures that are too little and too late. If the EU acted as quickly to address global excess capacity as it does to punish the United States, we likely would be in a different situation today. The EU’s punitive action completely disregards the national security imperatives of the United States – and indeed international security – and is yet another indicator that the EU’s trade and economic policies are out of step with reality.”

Canada also responded to the U.S. tariffs by imposing retaliatory tariffs on $20 billion in American imports effective tomorrow. Bourbon and other American whiskies are already subject to Canadian tariffs announced earlier this month, and many provinces responded to American tariffs by pulling U.S. whiskies and other spirits from their provincial liquor stores.

The United Kingdom did not issue its own retaliatory tariffs, citing a desire to work with the U.S. on a free trade agreement.

This story will be updated with additional information.