U.S. And E.U. Strike Deal, But Beverage Alcohol Hangs In The Balance
July 28, 2025While the U.S. and European Union struck a trade deal over the weekend that will include 15% tariffs on most E.U. products in the U.S., the rate on beverage alcohol remains to be determined. Industry players on both sides of the Atlantic are holding out hope that wine and spirits could be exempted from levies altogether as part of a “zero-for-zero” list of products.
“For now, we can say with confidence that the most extreme outcome, a 30%-50% tariff on E.U. wine as early as next week, appears to have been avoided,” said Ben Aneff, president of the U.S. Wine Trade Alliance trade group. “President von der Leyen (of the E.U.) noted that negotiations are ongoing and that the product list for zero tariffs is still being finalized. She specifically stated that discussions on alcoholic beverages have yet to be resolved. Other key questions remain unanswered, including whether there will be exemptions for wine already in transit and how enforcement will work if negotiations on alcohol extend past August 1.”
“We are optimistic that in the days ahead this positive meeting and agreement will lead to a return to zero-for-zero tariffs for U.S. and E.U. spirits products, which will benefit not only our nation’s distillers, but also the American workers and farmers who support them from grain to glass,” added Chris Swonger, president of the Distilled Spirits Council of the U.S. (DISCUS).
American whiskey would be a key beneficiary if the two sides can come to agreement. Since previous E.U. tariffs on the category—which took effect during similar trade tensions in the first Trump administration—were suspended in 2022, American Whiskey exports to the E.U. have jumped by nearly 60%, rising from $439 million in 2021 to $699 million in 2024, DISCUS noted.
On the other hand, if spirits and wine aren’t ultimately exempted from the broader 15%, the new charge will hit businesses on both sides of the Atlantic, including importers and distributors in the U.S., and result in higher prices for consumers.
“With a 15% tariff in place, the glass will be half-empty for at least 80% of Italian wines,” said Lamberto Frescobaldi, head of Marchesi Frescobaldi and president of Italy’s Unione Italiana Vini (UIV) trade group. “The projected impact on our industry is a €317 million loss over the next 12 months. For our U.S. partners, the estimated missed earnings could reach nearly $1.7 billion.
“According to our analysis, earlier this year, a €5 bottle of Italian wine would reach U.S. shelves at $11.50,” he continued. “With the new tariff and the weaker dollar, that same bottle could now retail for around $15. This means the markup from winery to shelf jumps from 123% to 186%.”—Daniel Marsteller
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