Bourbon Tariffs Are Back on the Menu if Trump Administration Can’t Reach Deal With EU

(Photo: Igor Golovniov / SOPA Images/Sipa USA) (Sipa via AP Images)

On Thursday, European officials unveiled a $107 billion retaliatory tariff plan against the United States targeting cars, soybeans, meat and — most surprisingly —  bourbon. It’s the latest in a long-unwinding saga that has added, removed and now readded American alcohol to the negotiating table between the Trump administration and the E.U.

The E.U.’s tentative plan is intended as a response to America’s blanket 20% tariff that was announced and then paused on “Liberation Day.” As the deadline ticks down until mid-July, European officials have now threatened tariffs targeting $11.29 billion worth of aircraft products, $2.26 billion worth of motor vehicles and $1.47 billion worth of alcohol.

Details of the plan are subject to change following consultations with the bloc’s 27 member states.

In March, the E.U. suggested a 50% tariff on American whiskey in response to the Trump administration’s 25% steel and aluminum tariffs. The move provoked a sharp reaction from the spirits sector. Chris Swonger, President of the Distilled Spirits Council, suggested that the “debilitating tariffs” couldn’t have come at a worse time, as distillers continue to struggle against an industry-wide slowdown.

President Trump responded to the tit-for-tat by threatening a 200% tariff on all E.U.-origin alcohol products. If implemented, the scheme would have potentially cost distillers across the pond billions, particularly those working with protected designation of origin products like scotch, champagne and cognac.

Insiders understood the implications as clear as day. French Prime Minister François Bayrou publicly called the move a “misstep,” while Ireland’s foreign minister, Simon Harris, said he “questioned the strategic relevance” of a whiskey-specific tariff. The E.U. eventually capitulated to officials by removing American whiskey and wine from its tariff plan in early April.

Exactly a month later, the tariff has been tentatively reintroduced.

The E.U.’s new list does not specify the tariff level on specific categories. Instead, it provides estimates on the value of targeted goods. It’s unclear whether the E.U. will reimpose its originally suggested 50% alcohol tariff, or possibly raise or lower the figure.

Details of the plan will be negotiated among member states over the next four weeks. European Commission President Ursula von der Leyen says the bloc remains fully committed to finding a mutually beneficial outcome.

“We believe there are good deals to be made for the benefit of consumers and businesses on both sides of the Atlantic,” she said in a statement. “At the same time, we continue preparing for all possibilities, and the consultation launched today will help guide us in this necessary work.”