If you had yet another tariff announcement via Truth Social on your 2025 bingo card, congratulations: Pop some champagne while you can still afford it.
President Trump dropped another tariff bomb today, threatening a 200% tariff on alcohol from European countries, including French champagne, in retaliation for the European Union deciding it was going to bring back a 50% tariff on US whiskey imports.
But going back even further, the European Union tax was in response to another tariff the US put on steel and aluminum imports.
“If this Tariff is not removed immediately, the US will shortly place a 200% Tariff on all WINES, CHAMPAGNES & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES,” Trump wrote on Truth Social. This will be great for the Wine and Champagne businesses in the US.” He used all caps—so you know he meant it.
Commerce Secretary Howard Lutnick gave us a peek into the president’s reasoning, telling Bloomberg TV that Trump was “totally annoyed” by the EU’s levy on American whiskey.
The entire market fell on the news, but higher tariffs hit European alcohol stocks particularly hard. Luxury conglomerate LVMH Moet Hennessy Louis Vuitton dropped 2.35%, spirit company Remy Cointreau sank 4.73%, while Pernod Ricard, one of the largest wine and spirits sellers in the world, fell 4.15%.
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And although American liquor companies are also getting caught in the tariff crossfire, Brown Forman, the company that operates the Jack Daniels brand, actually rose 1.01% today.
But if you think that it’s just billion-dollar booze companies that will feel the pain, think again: A bottle of prosecco that usually costs $15 could now run $45, according to the AP, which will totally ruin all your boozy brunch birthday party plans.
Not so happy hour
Trump’s threat is just the latest escalation of a trade war that has already crushed markets and given Wall Street traders a nervous breakdown.
So will this end up being a temporary selloff, or the beginning of an ongoing downturn? The truth is, nobody really knows for sure right now.
“Clearly this is going to be a much more volatile year and it remains to be seen if all of the revolutionary changes to the economy and trans-Atlantic alliances will lead to a recession or if it will lead to higher growth rates in the future, but in the meantime a more cautious and risk-off posture is warranted,” wrote Chief Investment Officer for Northlight Asset Management Chris Zaccarelli.—LB