The world is waiting with bated breath today for Donald Trump‘s announcements on “Liberation Day” in the US, the tariffs, that is, that he will announce from the Rose Garden at the White House.

Trump’s threat to impose 200% tariffs on European alcoholic beverages and wines, because the EU included in the countermeasures against American tariffs on steel and aluminum, the reinstatement of tariffs on bourbon whiskey, has caused unrest among Greek wine producers who hope that they will finally be left out of the war frame as happened during the first term of the American president in 2018. However, Brussels will first have to… put water in their wine. That is, not to include in the retaliation products that stimulate the planet’s vengeful instincts.

Although, as CNN notes, today was expected with relief by businesses that have been following the statements and “back and forth” of the US president for weeks, what will happen is estimated to open a new “Pandora’s box“, as after Trump’s announcements there will be countermeasures from the countries to which he will refer, thus provoking an escalation in the trade war that the US has already started.

Although Trump declared on Monday night that he has reached a tariff plan, his advisors continued to present him with options in view of the announcements at 23:00 tonight (Greece time).

Scenarios that have been heard so far include: Adjusting tariffs for each U.S. trading partner individually, imposing tariffs on some countries but not others, and imposing a flat rate of up to 20% on all imports.

A White House official told CNN that he did not expect Trump to make a decision until shortly before the Rose Garden ceremony.

For her part, White House spokeswoman Caroline Levitt said only that whatever Trump decides to announce on tariffs would be “effective immediately.”

What Trump is up to with the tariffs

According to CNN, Donald Trump sees the tariffs as a means to achieve four main goals:

• curbing the flow of fentanyl and illegal immigration into the United States,
• leveling the playing field with trading partners,
• increasing government revenue, and
• boosting domestic manufacturing.

Fentanyl has already been cited as a reason for imposing a 20% tariff on Chinese imports and threatening 25% tariffs on Canada and Mexico.

In Trump’s view, the United States is the victim of “theft” by countries with higher tariffs on U.S.-made products or by countries with which the U.S. has a trade deficit – that is, nations from which America imports more than it exports.

The US president has argued that tariffs are a way for the US government to rely less on income taxes as its main form of revenue. He has even gone so far as to say that tariff revenue could replace income taxes entirely.

What Greek producers are asking for

The Hellenic Wine Association (HWA) has already sounded the alarm about the disastrous effects that Trump’s tariffs will have on Greek wine, due to the importance of the American market for the sector – and pan-Europeanly. In a letter to the Minister of Rural Development and Food, Costas Tsiaras, and to the Greek MEPs, and in full coordination with the European Wine Business Association, the HWA is asking for support from the competent Greek authorities in its request to remove American wines (CN 2204) and aromatic wine products (CN 2205) from the proposed products on which the EU will impose additional tariffs.

This is because, as he points out, the contribution of American wines has a minimal impact on the US trade deficit, as their exports to the EU do not exceed 8%, while the expected US countermeasures on European wines will have tragic consequences for the European and, by extension, the Greek wine sector.

The EEC also underlines that bourbon whiskey should definitely be removed from the list of proposed countermeasures for 2018 and 2020 against the US. Noting that after the recent announcement by the Commission that it may impose additional tariffs on American whiskey produced in Kentucky, a predominantly Republican state, Trump threatened to impose 200% tariffs on European wines.

The United States is a leading and continuously growing destination for Greek wine. This is largely due to the fact that it is an expensive market, as the average export price was 7.03 euros/kilo last year, when at the same time in Germany it was only 2.75 euros/kilo.

Last year, almost 19% of Greek wine exports went to the US – the second export destination for our country – with a value of approximately 18.98 million euros, marking an increase of 12.37% compared to 2023. The quantities of wines exported to the US market also increased by 8.26%, reaching 2.7 million kilos last year compared to 2.49 million kilos in 2023. The US market is the most important market overall for European wines, representing 27% in value and 21% in volume.

Therefore, the consequences of the imposition of high tariffs by the US on European wines will be tragic for the EU, and of course for Greece, especially at a time when they will coincide with an absolutely negative situation where wine consumption is decreasing worldwide, while there is already a restructuring of production and other negative new data due to climate change, which further complicates the prospects of the sector.

However, the prime ministers of France, Italy and Ireland (along with the Netherlands, the countries with the largest exports of spirits to the US) have already publicly criticized the Commission’s strategy. Italian Prime Minister Giorgia Meloni warned of a vicious circle of escalating trade tensions. French Prime Minister François Bayrou accused the Commission of “hitting the wrong targets.” And Irishman Michael Martin criticized Ursula von der Leyen for resorting to the “book of retaliation”.

More generally, however, beyond wine and spirits, the Greek government is closely monitoring all developments regarding the imposition of tariffs in the EU. Although the Greek market is slightly exposed to that of the US, it is impossible not to be affected by the barrage of new tariffs, which will negatively affect the Eurozone as a whole.

The trade balance between Greece and the US for 2024 showed a surplus of 203.5 million euros, as Greek imports from the US amounted to 1.99 billion euros and exports to the US to 2.193 billion euros in the first eleven months of the year, representing 4.8% of the country’s total exports.

In terms of GDP, exports of goods to the US are around 1%, while the EU to the US is around 20%. Therefore, the imposition of tariffs in Europe will mainly affect other European economies. The product categories with the largest surplus were food and live animals (+521.6 million euros), while the largest deficit was fossil fuels and lubricants (-399 million euros).

Indirect impacts will arise through the supply chain, as part of Greek exports are intermediate products used in European production before being exported to the US. Furthermore, if overall EU exports to the US decrease, this will negatively affect the revenues of European companies, with an impact on Greek exports as well. Meanwhile, the loss of income for Europeans due to tariffs may negatively affect Greek tourism.