Trump’s 200% tariffs could have an unlikely winner — beer brewers

U.S. President Donald Trump’s threat to impose 200% tariffs on alcohol from Europe would serve a major blow to drinks makers on the continent, but it could have one unlikely beneficiary — the struggling beer industry.

President Trump said Thursday that he may target wine, champagne and other alcoholic beverages from France and other European nations after the European Union moved to reinstate an import tax on American whiskey in response to earlier Trump tariffs.

Such a levy, if enacted, could “literally wipe out” all global profits for some European drinks producers, Trevor Stirling, managing director and European beverages analyst at Bernstein, said Friday.

“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.”

French spirits maker Rémy Cointreau — which derives around one-third of its global sales from the U.S., would likely be among the worst affected — Stirling said, noting that markets were currently failing to fully price in the impact of the proposed tax.

Wine and spirits firms Pernod Ricard, Rémy Cointreau and Davide Campari all fell more than 3% Thursday, following Trump’s comments, with the latter two slipping again during Friday’s session. LVMH, which owns Moët & Chandon and Hennessy among others, briefly turned positive Friday before slipping back in the red following nine negative sessions.

“Investors are perhaps being a little bit too blasé about the potential that there is a real risk it could be a 200% tariff,” Stirling said, acknowledging that the rate was unusually high relative to those leveled against other countries and sectors. “One has learned never to underestimate the Trump administration.”

The levies form part of Trump’s broader vision to relocate global production to the U.S. — a strategy many analysts have questioned, particularly within the production-specific drinks and luxury sectors.

“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 Thursday.

Nevertheless, the proposals could provide a boon for the already highly localized beer industry, which has been under pressure over recent quarters amid declining sales and shifting consumer habits.

“Beer is just not in the crosshairs of this. Beer looks like an island of stability right now,” Stirling told “Squawk Box Europe.”

AB InBev, the world’s largest brewer, which owns brands including Budweiser, Corona and Stella Artois, told CNBC last month that it sees limited impact from tariffs given its high levels of domestic production.

“We don’t think that we’re going to have big topics to discuss during this year in terms of tariffs,” CEO Michel Doukeris said.

Heineken CEO Dolf van den Brink, meanwhile, in February described proposed U.S. tariffs, including on aluminum used in beer cans, to be “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,” he told “Squawk Box Europe” last month.