EU mulls 25% tariff on some US goods, drops planned 50% retaliatory tariff on American whiskey

The European Union (EU) has dropped a planned 50 per cent retaliatory tariff on American whiskey as it’s proposing 25 per cent tariffs on a selection of US goods in retaliation for US President Donald Trump’s decision to put levies on aluminum and steel imports. According to Bloomberg, EU member states had pushed for whiskey to be excluded to spare European wine and champagne producers from 200 per cent tariffs by Trump as retaliation.

Brussels had scrapped bourbon from a preliminary list of targeted goods, after bowing to demands from major wine exporters France and Italy, which were spooked by Trump's threat to hit a 200-per cent tariff in retaliation. According to AFP, Brussels has already launched its retaliation to Trump's 25-per cent metals tariffs, with a two-step response set to play out over the next six weeks.

Also Read: EU hits back at Donald Trump’s steel tariffs, imposes retaliatory 25% on US steel and aluminium products from April 1

EU plans 25% tariffs on these US goods

The European Commission, the bloc’s executive arm, shared a document listed dozens of product categories it plans to target, but bourbon was not included. The list of targeted products is diverse and includes diamonds, motorcycles, household appliances, safety glass, playing cards, tobacco, poultry and other agricultural products.

Most face a 25 per cent tariff, but a few would be hit with a 10 per cent rate. EU states aim to approve the plan later this week and it would enter into force on April 15, 2025, although most duties would not be collected until mid-May. Tariffs on soybeans and nuts would come into force on December 1, 2025.

Trump, however, indicated Monday that he is not considering a blanket pause on the global tariffs set to take effect Wednesday. Europe is in the process of responding to new Trump tariffs. EU trade ministers met in Luxembourg to mull the negotiation strategies and prepare potential countermeasures.

Also Read: Donald Trump rejects EU’s ‘very, very bad’ zero-for-zero tariff proposal: ’They don’t take our cars, like Japan’

Relief on whiskey tariff

Europe is the industry’s biggest whiskey export market, and some companies had been scrambling to ship as much product there as possible before mid-April, when the tariffs had been set to take effect. But EU wine and champagne producers may not be able to make profits after Trump tariffs. Trump hasn’t yet commented on the implications of the EU’s decision on American tariff policies.

The US-EU trade fight dates back to 2018, when Trump imposed hefty tariffs on steel and aluminum imports. In response, the EU slapped a 25 per cent tariff on American whiskey. That tariff was suspended in late 2021 as part of the negotiations by Joe Biden, and since then, American whiskey has entered the EU tariff-free.

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According to reports, the 50 per cent tariff, if it had taken effect, would have substantially affected US distiller Brown-Forman Corp, the maker of Jack Daniel’s, as the EU accounts for about 20 per cent of the company’s net sales.

With inputs from AFP and Bloomberg