Trump’s 200% Tariffs Could Have an Unlikely Winner — Struggling Beer Brewers

U.S. President Donald Trump’s threat to impose a 200% tariff on alcohol imports from Europe could deal a severe blow to the continent’s wine and spirits industry. However, analysts suggest that the proposal could unexpectedly benefit one sector—beer brewers.

Severe Impact on European Alcohol Industry

The proposed tariffs come in response to the European Union’s move to reinstate import taxes on American whiskey, following earlier trade restrictions imposed by the Trump administration. If enacted, the levy could significantly impact European drinks makers, with some potentially losing all global profits, according to Trevor Stirling, a managing director and European beverages analyst at Bernstein.

"If you take it at face value, for some of the producers, it could literally wipe out all of their global profits," Stirling told CNBC’s Squawk Box Europe on Friday.

French spirits company Rémy Cointreau, which generates about one-third of its global sales from the U.S., is expected to be among the worst affected. Other major players, including Pernod Ricard, Rémy Cointreau, and Davide Campari, saw their stock prices drop more than 3% on Thursday after Trump’s announcement, with further declines on Friday. LVMH, the luxury conglomerate behind Moët & Chandon and Hennessy, also saw fluctuations in its stock, briefly recovering before slipping back into negative territory after nine consecutive losing sessions.

Despite the potential severity of the tariffs, Stirling noted that markets might be underestimating the risk.

"Investors are perhaps being a little bit too blasé about the potential that there is a real risk it could be a 200% tariff," he said, adding that "one has learned never to underestimate the Trump administration."

Beer Industry Stands to Benefit

While the proposed tariffs threaten European wine and spirits producers, analysts suggest that the beer industry—already highly localized—could emerge as a beneficiary.

"Beer is just not in the crosshairs of this. Beer looks like an island of stability right now," Stirling said.

The beer sector has struggled in recent years due to declining sales and shifting consumer preferences. However, its reliance on domestic production shields it from international trade disruptions.

AB InBev, the world’s largest brewer and owner of Budweiser, Corona, and Stella Artois, previously stated that it expects minimal impact from trade tariffs due to its high levels of U.S. production.

"We don’t think that we’re going to have big topics to discuss during this year in terms of tariffs," AB InBev CEO Michel Doukeris told CNBC last month.

Meanwhile, Heineken CEO Dolf van den Brink described U.S. tariffs, including those on aluminum used in beer cans, as "relatively manageable."

"The beer industry is capital intensive and it’s very local. So, as such, it’s an industry that’s a bit less susceptible to disruption in international trade flows," van den Brink said in February.

Looking Ahead

Trump’s tariff threats align with his broader push to relocate global production to the U.S., a move that has sparked criticism from analysts who argue that certain industries, like luxury spirits and wine, cannot easily shift manufacturing locations.

"Provenance matters when selling premium spirits and wine—cognac has to be from Cognac, champagne from Champagne, etc. As a result, it is not a category that the Trump administration will encourage onshoring with," Chris Beckett, head of equity research at Quilter Cheviot, wrote in a note on Thursday.

If implemented, the 200% tariffs could set the stage for further trade disputes between the U.S. and the EU, impacting businesses on both sides of the Atlantic. For now, while European wine and spirits companies brace for potential losses, the struggling beer industry may see an unexpected advantage in the evolving trade landscape.