U.S.-EU Trade Dispute Escalates Over Tariffs
The trade conflict U.S. President Donald Trump instigated against the European Union has alcohol producers caught in the crossfire. Trump today announced tariffs of 200% on European alcoholic beverages, including Madeira wine, champagne, and other spirits. This move comes in response to the EU’s retaliation decision to impose a 50% tariff on American whiskey, a measure set to take effect on April 1, 2024.
Why does Trump Target EU Beverages?
France previously introduced a digital services tax on U.S. tech giants like Google and Amazon, arguing these companies generated significant revenue in France but paid minimal taxes. The 3% tax applied to large companies like Google or META earning over €750 million globally and €25 million in France from digital activities like targeted advertising and user data monetization. The U.S. saw this as unfairly targeting American companies and, under Trump, threatened tariffs on French goods in retaliation, already back in 2019.
European Retaliation Over Steel and Aluminum Duties
The European Commission recently introduced tariffs on several American products, including bourbon whiskey, motorcycles, and boats. These measures were designed as a response to existing U.S. tariffs of 25% on European steel and aluminum. Trump, in turn, threatened swift action against European alcoholic exports if the EU does not reverse its decision. He denounced the EU’s trade policies as unfair and accused the bloc of exploiting the U.S. economy.
Madeira Wine Industry Under Pressure
Among the products that could be affected is Madeira wine, a major export from Portugal’s island region. The United States is the largest non-European market for this product, accounting for 6.7% of total exports, valued at 2.5 million euros and 210,000 liters in 2024. A 200% tariff could significantly impact sales and disrupt business for producers reliant on American customers.
Alcohol Industry Calls for Exemption
The European alcohol industry has expressed serious concerns over the ongoing dispute. Spirits Europe, a trade group representing the sector, criticized both sides for dragging alcoholic beverages into a conflict originally centered on steel and aluminum. Producers have urged both governments to keep their industry out of tariff battles, warning that these policies could harm businesses and workers across both continents.
Source: RTP Madeira
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