Tariff Tensions: How Trump's Trade Policies are Shaking the Spirits Industry

The U.S. spirits industry is set to face price hikes, brand disappearances, and job losses due to Trump's tariffs on foreign alcohol. While the worst tariffs haven't emerged, existing levies still threaten significant economic damage. European producers warn of a sales drop, while brands like Diageo adjust strategies.

In the unfolding trade war instigated by U.S. President Donald Trump, tariffs on foreign alcohol have triggered potential price hikes and job losses in the spirits industry. Analysts and industry bodies reported on Thursday that reciprocal tariffs could drive popular brands off U.S. bar menus, affecting both sides of the Atlantic.

Despite avoiding the most severe tariffs, existing levies are high enough to impact sectors reliant on U.S. consumers for sales. The impact of a 25% levy on beer imports is set to reverberate throughout the industry, with Mexican, Canadian, and European labels facing significant regulatory burdens.

Industry leaders like Diageo and Campari have seen stock fluctuations as they navigate these challenges. French regions reliant on exports, such as Cognac, anticipate decreased sales amid these tensions. Meanwhile, U.S. wine businesses may face increased costs as discussions on strategy shifts and price adaptations continue.

(With inputs from agencies.)