Trump Champagne Tariff: Donald Trump escalates trade war with Europe, threatening 200% tariffs on latest retaliation for champagne and wine

When President Donald Trump proposed 200% tariffs on European champagne and wine, the U.S. EU trade conflict rose sharply, retaliating against the EU’s 50% tax on U.S. whiskey. The move has heightened concerns about the economic impact, with both sides aiming for key industries. EU tariffs focus on products from Republican strongholds such as Kentucky, Texas and Florida, which is the center of whiskey production, while Trump’s countermeasures aim to put pressure on France’s protected champagne division, billion-dollar exporters

The dispute stems from Trump’s earlier tariffs on steel and aluminum, prompting the EU to impose a levy on $699 million worth of U.S. goods, including bourbon and agricultural products. European Commission President Ursula von der Leyen condemned the harmfulness of tariffs to consumers and businesses, warning of rising prices and unemployment. But Trump doubled, accusing the EU of using U.S. trade and vowing to prioritize U.S. economic strength.

Complexity arises from a long-term agreement on the term “champagne”, which U.S. producers use in the 2005 exception. The protected names of the EU clashed with US label practices, increasing friction. With the European spirit exporting to the United States, reaching 2.9 billion euros per year, tariffs could undermine profitable trade relations, affecting sectors from agriculture to manufacturing. As tensions intensify, analysts warn that wider economic risks include inflationary pressures and potential global market instability.