European Spirits and Cosmetics Industries Respond to Tariffs

By Emma Rumney and Dominique Patton
LONDON/PARIS (Reuters) – Europe’s spirits and cosmetics industries hit back at the European Commission’s plan to impose tariffs on U.S.-made goods, arguing it jeopardizes their significantly larger trade with the United States in these sectors.

The European Commission intends to impose tariffs on €26 billion ($28.31 billion) worth of U.S. goods starting next month, escalating a global trade war in response to U.S. tariffs on steel and aluminum.

This action will include the re-imposition of suspended tariffs on products like bourbon whiskey and new levies targeting a range of other items, including various spirits, cosmetics, and essential oils.

Industry associations like spiritsEurope and the French cosmetics association FEBEA expressed concern that Brussels is putting European-produced goods—benefiting from significant trade surpluses with the U.S.—at risk of retaliatory tariffs.

FEBEA Secretary General Emmanuel Guichard described the potential tariffs as unnecessary, urging Brussels to abandon the plan. The association notes that France imports roughly €500 million annually in American cosmetics but exports about €2.5 billion in beauty products to the U.S.

European spirits producers worry about retaliatory measures from the U.S., their largest export market, stated Ulrich Adam, director general of spiritsEurope, representing major producers like Diageo and Brown-Forman.

The Distilled Spirits Council of the United States reported American whiskey exports to Europe reached $699 million in 2024, adding that previous bourbon tariffs led to a 20% decline. In contrast, European spirits exports to the U.S. hit €2.9 billion.

A senior executive from a large European spirits company commented, “We’re being thrown, by our own government, under the bus.”

France, Spain, and Italy had requested the Commission exempt wine and spirits from the tariffs. Spain’s Economy Ministry stated it is considering the needs of all affected sectors, while a source noted France is discussing the possible removal of bourbon from the tariff list.

SpiritsEurope claims many European producers also manufacture U.S. spirits, making them vulnerable to levies. U.S. spirits companies have significant investments in Europe, meaning job losses could result from targeting these businesses.

Consequently, shares of U.S. beauty firms like Estee Lauder and Elf Beauty saw declines of nearly 5%, while spirits stocks were led down by a 7% drop in Brown-Forman shares.

Brown-Forman CEO Lawson Whiting acknowledged at the UBS Consumer and Retail Conference that preparations have been made but that it’s a challenging situation.

($1 = 0.9184 euros)