In another tariff battle, U.S. President Donald Trump warned he might impose a 200% tariff on alcohol from France and other European countries after the EU decided to reinstate taxes on American whiskey. This latest threat adds to global trade war tensions, that have rattled the financial markets, fueling concerns about a potential recession.
Trump’s threat was a response to the European Union’s plan to impose tariffs on American whiskey and other goods next month. He stated, “We’ve been ripped off for years, and we’re not going to be ripped off.” The EU’s move, in turn, retaliates against Trump’s newly implemented 25% tariffs on steel and aluminum imports. The European Commission has yet to issue a statement on the situation.
Tariff Threat Shakes Up European Stocks
Shares of European alcohol producers tumbled on Thursday, with Pernod Ricard (PRNDY) (FR:RI), Davide Campari-Milano (DVCMY) (IT:CPR), and LVMH (LVMUY) (FR:MC) among the biggest losers. Pernod and Davide Campari were down over 4%, while LVMUY dropped almost 3%. Meanwhile, French spirits maker Rémy Cointreau SA (FR:RCO) saw a nearly 5% decline.
A tariff on European alcohol could impact a significant portion of liquor sold in the U.S., including LVMH’s Veuve Clicquot champagne, Heineken beer, Pernod Ricard’s Jameson Irish whiskey, and Campari’s Aperol aperitifs.
Among the affected companies, LVMH, owned by Europe’s richest man, Bernard Arnault, faces the biggest impact. In 2024, the luxury giant derived 25% of its global revenue from the U.S., making it particularly vulnerable to the proposed tariffs. At the same time, the British drinks giant Diageo (DEO), owner of brands including Johnnie Walker and Guinness, was just 0.34% lower.
On the other hand, U.S.-based Brown-Forman ($BF.B), the maker of Jack Daniel’s, gained 1.5%, benefiting from the potential competitive advantage against European rivals.
Investors may consider further research on European alcohol stocks as potential investment opportunities.
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