How Wine and Spirits Got Stuck in the Middle of a Global Trade War
How Wine and Spirits Got Stuck in the Middle of a Global Trade War
Over the last seven years, the alcohol industry has faced chaos and cost increases at the hands of a global trade war. Here’s where we currently stand and how we got here.
By Kate Dingwall
Ever since President Trump’s first round in the Oval Office, the back-and-forth of various trade wars has made headlines. All throughout, the beverage and alcohol industry has been firmly lodged in the center of the conflict.
The first blow came in 2018. Triggered by a breakdown of talks over steel and aluminum, the European Union imposed a retaliatory tariff on American whiskey. In response, the U.S. government, led by President Trump, announced a series of sky-high retaliatory tariffs, many of which take aim at U.K.– and E.U.-produced alcohol.
Champagne producers, whisk(e)y distillers, restaurateurs, and importers on both sides of the Atlantic are still feeling the repercussions.
Despite the widespread damage, the tariff conversation came back around with Trump’s third run for president. As soon as he returned to the Oval Office in early 2025, he turned up the heat, with official announcements declaring 25%, 50%, and 200% tariffs.
Through this all, Scotch producers, Champagne makers, Bourbon distillers, Mexican tequileros, and the importers, sellers, and drinkers of all of the above have been subjected to an ongoing period of negotiating, pivoting, worrying, and navigating chaos.
Earlier this month, Trump’s tariffs officially took effect. To help unpack where we currently stand and may go from here, we laid out the complete chronology of the current rollercoaster of global tariffs (along with some historical context) and how it affects the wine and spirits industry.
1791
Tariffs first hit the American alcohol industry after the Revolutionary War, with a levy on all imported and American-made distilled spirits to help pay off the national debt.
The federal government initiated similar tariffs after the Civil War—when up to 40% of the government’s income came from alcohol taxes—during Prohibition, the Great Depression, and World War II to help the country rebuild.
// Create the element
var script_68daca2a1b0b6 = document.createElement(“script”);
script_68daca2a1b0b6.innerHTML = `
window.googletag = window.googletag || {cmd: []};
googletag.cmd.push(function() {
var adType = “leaderboard”;
var mapping;
var lbmapping = googletag.sizeMapping()
.addSize([1024, 0], [[970, 250], [970, 90], [1, 1], [728, 90]])
.addSize([728, 0], [[728, 90], [1, 1]])
.addSize([320, 0], [[1, 1], [300, 50], [300, 100], [320, 50], [320, 100]])
.addSize([0, 0], [[1, 1], [320, 50]])
.build();; // Size mapping for leaderboard ads
var medrecmapping = googletag.sizeMapping()
.addSize([1024, 0], [[300, 600],[300, 250]])
.addSize([728, 0], [300, 250])
.addSize([320, 0], [[1, 1],[300, 250]])
.addSize([0, 0], [[1, 1], [300, 250]])
.build(); // Size mapping for med rectengle ads
if(‘/39808611/article_page/article_leaderboard_1’ == ‘/39808611/article_page/article_leaderboard_1’
|| ‘/39808611/article_page/article_leaderboard_1’ == ‘/39808611/article_page/article_leaderboard_2’
|| ‘/39808611/article_page/article_leaderboard_1’ == ‘/39808611/article_page/article_leaderboard_3’) {
mapping = googletag.sizeMapping()
.addSize([1920, 0], [[728, 90]]) // >= 1920px
.addSize([1440, 0], [[728, 90]]) // 1440px-1919px
.addSize([730, 0], [[300, 250]]) // 730px-1439px
.addSize([0, 0], [[320, 100], [320, 50], [300, 100], [300, 50], [300, 250]]) // Up to 729px
.build();
} else {
mapping = adType == ‘leaderboard’ ? lbmapping : medrecmapping;
}
googletag.defineSlot(‘/39808611/article_page/article_leaderboard_1’, [],
‘div-gpt-ad-68daca2a1b0b6’).addService(googletag.pubads()).defineSizeMapping(mapping);
googletag.pubads().enableSingleRequest();
googletag.pubads().collapseEmptyDivs();
googletag.display(‘div-gpt-ad-68daca2a1b0b6’);
});
`;
// Append the script to the body
document.body.appendChild(script_68daca2a1b0b6);
1994
The North American Free Trade Agreement (NAFTA) dictates that American, Mexican, and Canadian wine and spirits can criss-cross the border without tax implications.
1997
A similar trade agreement is installed between the U.S. and E.U. With it, American whiskey and wine and European alcoholic beverages can move across the ocean sans levies.
June 2018
Under President Donald Trump’s first term, a dispute over aluminum and steel results in a broad-hitting tariff war. In response to American tariffs on steel and aluminum, the E.U. imposes a 25% retaliatory tariff on American whiskey. Mexico implements a 25% tariff on U.S.-made whiskey, too.
This is an unsteady time for the U.S. hospitality industry with sales of spirits facing a slowdown and rising food and labor costs. These new higher tariffs on E.U. spirits products will further compound the challenges facing restaurants and bars nationwide.
Distilled Spirits Council President and CEO Chris Swonger.
October 2019
Another conflict arises. Longstanding tensions surrounding Boeing and Airbus subsidies result in a new wave of transatlantic tariffs.
The U.S. rolls out a 25% retaliatory duty specifically on French wines, Scottish single malts, Irish whiskey, and Italian cheeses. Also hit: still wines from Germany, Spain, France, and Britain with under 14% alcohol by volume, such as Chablis and Alsatian Rieslings, and liqueurs and cordials from Germany, Ireland, Italy, Spain, and the U.K.
// Create the element
var script_68daca2a1ba96 = document.createElement(“script”);
script_68daca2a1ba96.innerHTML = `
window.googletag = window.googletag || {cmd: []};
googletag.cmd.push(function() {
var adType = “leaderboard”;
var mapping;
var lbmapping = googletag.sizeMapping()
.addSize([1024, 0], [[970, 250], [970, 90], [1, 1], [728, 90]])
.addSize([728, 0], [[728, 90], [1, 1]])
.addSize([320, 0], [[1, 1], [300, 50], [300, 100], [320, 50], [320, 100]])
.addSize([0, 0], [[1, 1], [320, 50]])
.build();; // Size mapping for leaderboard ads
var medrecmapping = googletag.sizeMapping()
.addSize([1024, 0], [[300, 600],[300, 250]])
.addSize([728, 0], [300, 250])
.addSize([320, 0], [[1, 1],[300, 250]])
.addSize([0, 0], [[1, 1], [300, 250]])
.build(); // Size mapping for med rectengle ads
if(‘/39808611/article_page/article_leaderboard_1’ == ‘/39808611/article_page/article_leaderboard_1’
|| ‘/39808611/article_page/article_leaderboard_1’ == ‘/39808611/article_page/article_leaderboard_2’
|| ‘/39808611/article_page/article_leaderboard_1’ == ‘/39808611/article_page/article_leaderboard_3’) {
mapping = googletag.sizeMapping()
.addSize([1920, 0], [[728, 90]]) // >= 1920px
.addSize([1440, 0], [[728, 90]]) // 1440px-1919px
.addSize([730, 0], [[300, 250]]) // 730px-1439px
.addSize([0, 0], [[320, 100], [320, 50], [300, 100], [300, 50], [300, 250]]) // Up to 729px
.build();
} else {
mapping = adType == ‘leaderboard’ ? lbmapping : medrecmapping;
}
googletag.defineSlot(‘/39808611/article_page/article_leaderboard_1’, [],
‘div-gpt-ad-68daca2a1ba96’).addService(googletag.pubads()).defineSizeMapping(mapping);
googletag.pubads().enableSingleRequest();
googletag.pubads().collapseEmptyDivs();
googletag.display(‘div-gpt-ad-68daca2a1ba96’);
});
`;
// Append the script to the body
document.body.appendChild(script_68daca2a1ba96);
November 2020
As the aerospace manufacturing dispute continues, the European Union includes American rums, brandies, and vodkas under its 25% tariff umbrella.
June 2021
Six months after President Trump leaves office for the first time, the U.S., U.K., and E.U. agree to suspend tariffs related to the WTO Boeing-Airbus disputes, for five years.
Over the next two years, under President Biden, all tariffs are settled. The E.U. suspends retaliatory tariffs on American whiskey in March of 2022, while the U.K. removes its tariffs on the category in June of 2022.
While the tariff crisis may be over—for now—the ramifications are still sending shockwaves through the industry. Over the three-year period, starting in 2018, American whiskey exports drop 42%, while Scotch whisky imports are down by almost 38%.
2024
During his presidential campaign Donald Trump pledges tariffs bigger than ever before. Threats include 100% tariffs on Mexico, 60% on China, and 20% on all other countries.
He admits the tariffs may cause “some pain” for Americans, but adds, “it will all be worth the price that must be paid.”
January 2025
President Trump is sworn into office on January 20. He pledges he will instate a 25% tariff on Canada and Mexico, including alcoholic beverages like whisky and tequila, starting February 1.
Even if alcohol is excluded from final rates, industry insiders are freaking out. Corks, casks, glass, bottle stoppers, concrete eggs, and countless other production essentials are sourced from the global supply chain. If the costs of these products increase, so will the cost of doing business.
// Create the element
var script_68daca2a1c5ae = document.createElement(“script”);
script_68daca2a1c5ae.innerHTML = `
window.googletag = window.googletag || {cmd: []};
googletag.cmd.push(function() {
var adType = “leaderboard”;
var mapping;
var lbmapping = googletag.sizeMapping()
.addSize([1024, 0], [[970, 250], [970, 90], [1, 1], [728, 90]])
.addSize([728, 0], [[728, 90], [1, 1]])
.addSize([320, 0], [[1, 1], [300, 50], [300, 100], [320, 50], [320, 100]])
.addSize([0, 0], [[1, 1], [320, 50]])
.build();; // Size mapping for leaderboard ads
var medrecmapping = googletag.sizeMapping()
.addSize([1024, 0], [[300, 600],[300, 250]])
.addSize([728, 0], [300, 250])
.addSize([320, 0], [[1, 1],[300, 250]])
.addSize([0, 0], [[1, 1], [300, 250]])
.build(); // Size mapping for med rectengle ads
if(‘/39808611/article_page/article_leaderboard_2’ == ‘/39808611/article_page/article_leaderboard_1’
|| ‘/39808611/article_page/article_leaderboard_2’ == ‘/39808611/article_page/article_leaderboard_2’
|| ‘/39808611/article_page/article_leaderboard_2’ == ‘/39808611/article_page/article_leaderboard_3’) {
mapping = googletag.sizeMapping()
.addSize([1920, 0], [[728, 90]]) // >= 1920px
.addSize([1440, 0], [[728, 90]]) // 1440px-1919px
.addSize([730, 0], [[300, 250]]) // 730px-1439px
.addSize([0, 0], [[320, 100], [320, 50], [300, 100], [300, 50], [300, 250]]) // Up to 729px
.build();
} else {
mapping = adType == ‘leaderboard’ ? lbmapping : medrecmapping;
}
googletag.defineSlot(‘/39808611/article_page/article_leaderboard_2’, [],
‘div-gpt-ad-68daca2a1c5ae’).addService(googletag.pubads()).defineSizeMapping(mapping);
googletag.pubads().enableSingleRequest();
googletag.pubads().collapseEmptyDivs();
googletag.display(‘div-gpt-ad-68daca2a1c5ae’);
});
`;
// Append the script to the body
document.body.appendChild(script_68daca2a1c5ae);
February 2025
On February 1, President Trump signs an executive order announcing 25% tariffs on Mexico and Canada to commence February 4. He claims it is a national emergency triggered by drug trafficking and undocumented immigration between the three nations.
Two days later, on February 3, Trump agrees to a 30-day pause. The industry breathes a momentary sigh of relief.
February 13 rolls around: President Trump restarts the tariff conversation, announcing he will increase U.S. tariffs to match other international tax rates. Called the “Fair and Reciprocal Plan,” the administration claims it’s about fairness this time.
The industry is facing tremendous headwinds of late. It’s due to multiple factors, such as the declining consumption habits of younger generations, the emergence of THC beverages and recreational cannabis use, the use of GLP1 drugs, and the overall impact the economy has had on consumer goods. And as a whole, inflation continues to remain relatively high.
Brett Dunne, managing director U.S. and Canada of Lucas Bols
March 2025
The 30-day pause ends on March 4. Trump’s 25% tariffs are set into motion for Canada and Mexico. After throwing around varied rates—from 10% to 145%—China’s are set at 20%.
Anger spreads throughout all three nations. Mexico’s President Claudia Sheinbaum promises retaliatory tariffs, as does Canada’s Prime Minister Justin Trudeau.
Influenced by higher-ups at automotive manufacturers Ford, General Motors, and Stellantis, Trump grants a one-month exemption for all imports from Canada and Mexico to help U.S. automakers. This time, reciprocal tariffs are slated to go in motion on April 2.
That’s not good enough for the European Union. They retaliate on March 12, announcing new duties on U.S. farm and industrial products, including bourbon and wine. Canada also takes retaliatory trade action—imposing retaliatory tariffs worth $20 billion on U.S. imports including wine, spirits, and beer.
// Create the element
var script_68daca2a1cc6a = document.createElement(“script”);
script_68daca2a1cc6a.innerHTML = `
window.googletag = window.googletag || {cmd: []};
googletag.cmd.push(function() {
var adType = “leaderboard”;
var mapping;
var lbmapping = googletag.sizeMapping()
.addSize([1024, 0], [[970, 250], [970, 90], [1, 1], [728, 90]])
.addSize([728, 0], [[728, 90], [1, 1]])
.addSize([320, 0], [[1, 1], [300, 50], [300, 100], [320, 50], [320, 100]])
.addSize([0, 0], [[1, 1], [320, 50]])
.build();; // Size mapping for leaderboard ads
var medrecmapping = googletag.sizeMapping()
.addSize([1024, 0], [[300, 600],[300, 250]])
.addSize([728, 0], [300, 250])
.addSize([320, 0], [[1, 1],[300, 250]])
.addSize([0, 0], [[1, 1], [300, 250]])
.build(); // Size mapping for med rectengle ads
if(‘/39808611/article_page/article_leaderboard_2’ == ‘/39808611/article_page/article_leaderboard_1’
|| ‘/39808611/article_page/article_leaderboard_2’ == ‘/39808611/article_page/article_leaderboard_2’
|| ‘/39808611/article_page/article_leaderboard_2’ == ‘/39808611/article_page/article_leaderboard_3’) {
mapping = googletag.sizeMapping()
.addSize([1920, 0], [[728, 90]]) // >= 1920px
.addSize([1440, 0], [[728, 90]]) // 1440px-1919px
.addSize([730, 0], [[300, 250]]) // 730px-1439px
.addSize([0, 0], [[320, 100], [320, 50], [300, 100], [300, 50], [300, 250]]) // Up to 729px
.build();
} else {
mapping = adType == ‘leaderboard’ ? lbmapping : medrecmapping;
}
googletag.defineSlot(‘/39808611/article_page/article_leaderboard_2’, [],
‘div-gpt-ad-68daca2a1cc6a’).addService(googletag.pubads()).defineSizeMapping(mapping);
googletag.pubads().enableSingleRequest();
googletag.pubads().collapseEmptyDivs();
googletag.display(‘div-gpt-ad-68daca2a1cc6a’);
});
`;
// Append the script to the body
document.body.appendChild(script_68daca2a1cc6a);
Canadian citizens, business, and local governments also boycott American products. Media reports circulate videos of Canadians pulling Kentucky bourbon off liquor store shelves.
President Trump responds in force. On March 13, he threatens a 200% tariff on European Champagne, wine, and spirits. In response, the E.U. moves to hit American whiskey with a 50% tariff.
The U.S. Wine Trade Alliance urges American companies to pause shipments of European wine, spirits, and beer, or face potential 200% tariffs.
“This would be a death knell for our company and our industry,” says Harmon Skurnik, president of Skurnik Wine & Spirits.
This red light, green light game of tariffs continues until early September.
April 2025
The Trump administration declares April 2 to be “Liberation Day.” With baited breath, the wine and spirits industries wait for the scheduled press conference announcing upcoming tariffs.
It’s less dramatic than expected. Trump announces a 10% baseline tax on imports from all countries, with more specific levies on certain countries. China faces a 34% tariff; the E.U., 20%; South Africa, 31%;, and Japan, 24%.
On April 9, Trump authorizes a 90-day pause on most tariffs to allow time for deliberation. It’s a relief, albeit a temporary one, for producers and importers.
May 2025
On May 26, Trump announces he’s delaying the 50% tariff on the E.U. until July 9 to give both sides more time to negotiate.
Beverage industry organizations, including the Toasts Not Tariffs Coalition, rally for tariff-free trade for wine and spirits. They’re optimistic, hoping for zero-for-zero tariffs. If the proposed tariffs were to come to life, the entire beverage industry could be collateral damage.
As beverage experts point out, it’s already a dire time for wine and spirits.
“The industry is facing tremendous headwinds of late,” says Brett Dunne, managing director U.S. and Canada of Lucas Bols. “It’s due to multiple factors, such as the declining consumption habits of younger generations, the emergence of THC beverages and recreational cannabis use, the use of GLP1 drugs, and the overall impact the economy has had on consumer goods. And as a whole, inflation continues to remain relatively high.”
August 2025
It’s official: on August 7, new tariffs take effect. The European Union, New Zealand, and Japan are subject to 15% tax, and 30% for South Africa. Canada is slapped with a 35% tariff rate, though this does not apply to alcoholic beverages.
Industry professionals are disappointed.
“This is an unsteady time for the U.S. hospitality industry with sales of spirits facing a slowdown and rising food and labor costs,” says Distilled Spirits Council President and CEO Chris Swonger. “These new higher tariffs on E.U. spirits products will further compound the challenges facing restaurants and bars nationwide.”
September 2025
Winemakers, importers, restaurant owners, and spirits producers are devastated. Though far less than what was originally threatened, even 15% is catastrophic news for the bottom line.
Despite all the back-and-forth, these newly implemented tariffs aren’t finite. In early September, the U.S. Court of Appeals rules that most of the Trump administration’s tariffs are “invalid as contrary to law”—i.e. illegal.
They are left in place, as the case moves toward the Supreme Court for further deliberations.
This would be a death knell for our company and our industry.
Harmon Skurnik, president of Skurnik Wine & Spirits
More Tariff Coverage
- At Wine Enthusiast’s Sip of Italy 2025, eyes were locked on the future of the industry.
- Is a drink a day healthy? We compiled the medical world’s alcohol recommendations, dating back to 1980.
- Though trends like adding ice to beer and jalapeño to Sauvignon Blanc might sound a bit out-there, we think it’s time to stop criticizing Gen-Z’s drinking habits.
- Meet the nominees for Wine Enthusiast’s 2025 Wine Star Awards.
- These 8 Latinx industry pros are changing the face of wine.
In the Shop
Flex Your Collection
Transform your home into a wine lover’s paradise with a custom wine cellar. From design to functionality, Wine Enthusiast can create the perfect storage solution.
The post How Wine and Spirits Got Stuck in the Middle of a Global Trade War appeared first on Wine Enthusiast.
