Chicago restaurateurs alarmed by threat of 200% tariff on alcoholic beverages from Europe
President Trump on Thursday threatened to impose a stiff 200% tariff on all alcoholic products coming into the U.S. from European countries.
This threat was a response to the EU's 50% tariffs on American whiskey, which are set to go into effect next month.
The tariff tit-for-tat now setting the stage for what some local Chicago businesses say could be a disaster. In short, it means your favorite Italian wine or French bubbly may soon become a luxury item.
"We've been ripped off for years, and we're not going to be ripped off," President Trump said Thursday. "No, I'm not going to bend at all."
Despite being just a threat, the news is already sending shockwaves to the wine and spirits industry overseas…
In a country like France, known for its high-end champagne, a 200% tariff could translate into billions in losses.
For consumers – the tariff could translate into astronomical price tags — where an un-tariffed $15 bottle of Italian prosecco could shoot up to $45.
"How do we pass down a 200% tariff tax on our consumers?" said Sam Sanchez, who owns six restaurants in Chicago — including Moe's Cantina in River North. "The people won't come out, won't pay."
A 200% tariff on European alcohol isn't exactly news Sanchez wants to hear. He is already bracing for the impact of looming tariffs on goods from Mexico such as like avocados, mezcal, and tequila.
"These are essential products that cannot be substituted by American products, so that scares us," Sanchez said.
The fear is now trickling across businesses that may be forced to push the tax on the consumer, which Sanchez said could be catastrophic.
"We are going to put out of business every mom-and-pop restaurant in the United States… if it happens," Sanchez said.
All the talk about tariffs has so far had a bad impact on the market, where most of the stock gains made since the election have now disappeared.
It is an economic climate the Trump administration said it is prepared for, where things will likely get worse before they get better.
