President Donald Trump’s latest bid to tackle the European Union’s “hostile and abusive” trading practices is to tack new duties on alcohol imports. Not only would that make European wine more expensive for consumers, but it could devastate the restaurant business.
In response to Trump’s tariffs on steel and aluminum, the E.U. hiked its duties on imports of American whiskey to 50%, in a move that the Distilled Spirits Council of the United States called “deeply disappointing.” That set off Trump’s new threat.
“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 on his Truth Social, saying that U.S. businesses will benefit.
A tariff is a tax on an imported good and paid for by the importing business, not the foreign seller. They’re designed as a protective measure that encourages domestic companies to shift manufacturing back to the U.S. and consumers to buy “Made in America” products.
Read More: The Trump tariffs are coming for wine. American restaurants could die
But wine and other alcohol products aren’t able to be mixed and matched as easily as other goods, such as steel. Ninety-five percent of the world’s bourbon is made in Kentucky. Champagne can only be called champagne if it is made in France, uses a certain method, and is from the region of Champagne.
“Chardonnay grown in the soil of Chablis produces a wine that cannot be recreated anywhere on earth. The same can be said for Nebbiolo in Piedmont, Pinot Noir in Burgundy or Tempranillo in Rioja,” Harmon Skurnik, a member of the U.S. Wine Trade Alliance, told Wine Spectator.
After Trump imposed tariffs on wine during his first term, many companies absorbed some of the cost to avoid raising prices and potentially losing customers. But fewer people are drinking alcohol these days, resulting in last year becoming one of the “most challenging years in collective memory” for the beverage alcohol industry, according to the Wine & Spirits Wholesalers of America’s (WSWA).
Wine consumption peaked in 2021 at 3.16 gallons per person, with per capita consumption dropping 15% to 2.68 gallons by 2023, according to data from the U.S. Wine Institute. By volume, wines and spirit sales dropped 7.2% and 3.7%, respectively, in 2024 according to WSWA’s SipSource report. Revenue sank 4.8% overall for wine and spirits sellers last year.
If enacted, Trump’s new tariffs could result in price hikes for consumers at liquor and grocery stores and put pressure on the restaurant business. Most restaurateurs make 50% to 60% of their profit on wine and drinks.
“Restaurants are run at ridiculously low margins, like 3% on average, and when one of our better profit-making products is taken off the table, I don’t know where we’ll make it up,” DeWayne Schaaf, chef and owner of Celebrations, a fine dining restaurant in Cape Girardeau, Missouri, told Quartz in November.
“A lot of people are going to have to pivot: lose wine, lose staff or close days,” he said.
—Peter Green contributed to this article.