• From American whiskey to French Champagne, alcohol has become a factor in Trump's trade war.
• Both beverages could see tariffs in the coming weeks unless the US reaches a deal with the EU.
• Businesses, from wine shops to restaurants, are already reacting to the potential tariffs.

President Donald Trump might not drink, but his trade war is shaking and stirring up the market for some of the most popular boozy beverages globally.

On Wednesday, the European Union responded to US tariffs on aluminum and steel by imposing a 50% duty on various products starting on April 1, including one of the US's most well-known drinks: whiskey.

Just a day later, Trump threatened a 200% tariff on wine and alcohol from EU countries, including iconic French Champagne. It's unclear when or if that levy will take effect, but it's already prompting reactions in the US.

Some wine shops, for instance, are promoting specials for customers who want to stock up on European wine, with one in New York City sending out emails to regular customers offering "tariff buster" deals.

Alexandra Ivanac and her husband Stephen Varela, who run the Italian-Croatian restaurant Villa Berulia in Manhattan, said Trump's threats are "alarming." The restaurant carries about 75 European wines and upcharges alcohol 2.5 to 3 times, higher than many dishes.

"How does an Italian restaurant pivot away from European wine?" Varela said.

It's making them question whether to absorb the costs or pass them on to customers. Ivanac said they may instead look to South America, South Africa, Australia, or New Zealand for wines if the tariffs go into effect, as well as some California wines. Varela also said they may order twice as much wine as normal and stockpile it in their basement.

"Some of these wines are going for, on the higher end, $200 to $300, so how much could we really increase prices?" Varela said, adding some customers are more cautious about spending given economic concerns.

The US accounts for about 31% of EU wine and spirit exports, according to Eurostat, the EU statistics office. The EU, meanwhile, made up about 40% of the export market for US spirits in 2023, according to the Distilled Spirits Council of the United States.

For US winemakers, the latest tariff threat could be an opportunity.

Zach Pelka, cofounder and COO at New York-based Une Femme Wines, said his company developed a supply chain that sits almost entirely within the US after COVID made sourcing abroad more complicated and expensive.

Pelka said he expects more US-based alcohol brands to focus domestically if Trump's 200% tariff takes effect.

If the US's threats come true, Pelka expects that Une Femme will become a more attractive option for restaurants, retailers, hotels, and other customers who want a steady source of wine in the US.

"As of today, I think it becomes the focal point of the pitch" to buyers, he said of the potential tariff.

Tariff talk has already caused consumers in other countries to buy from local suppliers instead of importing from the US. Many Canadians are looking for "Made in Canada" alternatives in light of the levies that the Trump administration has threatened and enacted on that country's goods.

Whether any or all of the taxes materialize remains to be seen. Last week, Trump imposed a 25% tariff on imports from Canada and Mexico — only to suspend it shortly afterward for most items until April 2.

Even if the tariffs take effect, drinkers might not see higher prices right away.

Blake Leonard, president of wine at Stew Leonard's Wine & Spirits, which operates several shops in Connecticut, New Jersey, and New York, told BI that some of her suppliers brought months' worth of European wine and even tequila from Mexico into the US to get ahead of potential tariffs.

That early action will help Stew Leonard's keep prices for many beverages stable, at least temporarily. "The last thing we want to do as a family business is raise prices for our customers," Leonard said. About half of all wine that the chain sells comes from European nations — primarily France and Italy, she said.

To say the situation is fluid "would be a massive understatement," said Lawson Whiting, the CEO of Brown-Forman, which makes Jack Daniel's whiskey and counts Europe as a major export market. "It seems like things are changing very, very quickly."

The April 1 effective date for the EU's tariffs on US whiskey leaves time for the US and the EU to resolve their differences, Whiting said at an industry conference on Wednesday, the day the EU announced its latest tariffs.

"That does give me some optimism that both the administration and the other counterparties over the last few weeks have been trying to resolve things," Whiting said.

Have a tip? Contact this reporter via email at [email protected]

• The US Surgeon General announced that alcohol causes cancer.
• The "1-2-3 rule" can help you cut down on drinking, especially in social settings.
• Limit yourself to 1-2 drinks a day, never exceeding three.

The US Surgeon General Dr. Vivek Murthy issued a warning Friday, saying alcohol causes cancer and no amount of alcohol is safe.

Still, going fully sober doesn't always work for everyone.

Katherine Metzelaar, a registered dietitian, told Business Insider that, unless a client has experience of substance abuse, she usually recommends drinking in moderation over participating in events like Dry January.

"Cutting it out entirely often leads to the cycle of restricting alcohol and then binging alcohol," Metzelaar told Business Insider.

To make alcohol moderation less vague, some people follow the "1-2-3 rule," a rough guideline on how much to drink each day. According to the US Coast Guard, the 1-2-3 rule is:

• No more than one standard drink per hour
• No more than two standard drinks per occasion
• No more than three drinks a day (more than three constitutes binge drinking, according to the National Institute on Alcohol Abuse and Alcoholism)

Metzelaar says there "isn't a one-size-fits-all answer" to alcohol consumption, but the 1-2-3 rule roughly falls in line with the CDC's advisory of no more than a drink a day for women and two drinks a day for men.

We want to hear from you about your drinking habits. If you're comfortable sharing with a reporter, please fill out this quick form. Note: We won't publish any part of your submission unless we contact you first.

She said not a perfect rule, especially since drinking notoriously makes it tougher to control impulses or always keep track of drinks.

For some, it can be a helpful starting point for cutting down on alcohol, particularly in social settings.

Set an intention before drinking

Metzelaar said guidelines like the 1-2-3 rule can help some people stick to a plan. At the same time, drinking can make you lower your inhibitions and go for that third drink every time.

To make the most of the rule, she recommended setting an intention before a social event, such as only having one drink that evening, drinking water between each alcoholic beverage, or ordering mocktails all night.

Knowing your triggers

To really keep up the habit of alcohol moderation, Metzelaar suggests journaling how much you drink every day to "get a sense of what the patterns are."

Because the rule isn't foolproof, she said it's helpful to know the emotions behind wanting to drink more, such as social anxiety. "That's worth getting really curious about," she said.

Caroline Susie, a registered dietitian who primarily works with women, said her clients have tracked patterns like work stress or coping with childcare responsibilities. That can help them know when they're more tempted to go over the 1-2-3 rule.

You still shouldn't drink every day

Even if you follow the 1-2-3 rule each time you go out, you should also be mindful of how often you consume alcohol in general. Studies show that drinking 1-2 drinks a day is still linked to cancer.

Alcohol is the third leading cause of preventable cancer in the US, after smoking and obesity, according to the US Surgeon General's advisory.

To lower your intake, Metzelaar recommends going without alcohol for at least a few days a week. For example, you might abstain from drinking during the week and then have a glass of wine with friends over the weekend. Some people prefer being "dry by default," only drinking on rare occasions.

With the growth of the sober-curious movement, Susie said it's easier than ever to make alcohol swaps with N/A beers and sparkling water when you're socializing.

"There are just so many things that you can reach for that can still feel like a treat," she said.

• The US Surgeon General recommended disclosing the cancer risk of alcoholic beverages on Friday.
• While just a recommendation, the advisory sent shares of some big alcohol manufacturers lower.
• It also presents a fresh opportunity for makers of alternatives to alcohol.

The US Surgeon General's finding Friday that alcohol causes cancer led to stock declines for some of the beverage industry's biggest names — and an opportunity for some newer entrants.

Drinking is a major cause of preventable cancer, Dr. Vivek Murthy said in the advisory, which also recommended placing a notice about the cancer risk on beer, wine, and spirits — similar to how packs of cigarettes include warnings about their health risks.

On its own, the recommendation doesn't mean that labels on booze will change. That would require an act of Congress.

Murthy is also part of President Joe Biden's administration and will be replaced by President-elect Donald Trump's nominee for surgeon general after he takes office on January 20. That nominee, Janette Nesheiwat, could take a different view on the advisory if she's confirmed by the Senate.

However, the advisory prompted a response from some companies and the markets today. Here's what it might mean:

Shares of alcohol companies like Diageo and AB InBev lost out

Stocks of some of the biggest alcohol companies in the world were down Friday after the surgeon general released his advisory.

Shares of Budweiser-maker Anheuser-Busch InBev closed down 2.8% in Belgium. In London, shares of Diageo, the company behind Captain Morgan rum and Ketel One vodka, closed nearly 4% lower.

Still, there's reason to doubt that the surgeon general's advisory will lead to a lot less drinking and fewer sales for the big booze makers, Kate Bernot, lead analyst at Sightlines, which researches the alcohol space, told Business Insider.

Annual per-capita alcohol consumption in the US has hovered around 2 ½ gallons since 2012, Bernot said, citing data from the National Beer Wholesalers Association. Gallup polling shows that the percentage of Americans who say that they drink alcohol has mostly stayed between 60% and 65% since the early 1990s, she added.

That stability in habits comes despite previous research into the link between alcohol consumption and cancer as well as the growth of "Dry January," a commitment drinkers make to avoid drinking during this time of the year.

"Maybe some people change their behavior, but I don't think we're going to see population-level dramatic shifts in alcohol consumption," Bernot said.

Makers of non-alcoholic beer and spirits could get a boost

Even if there is a nationwide shift away from alcohol, many of the big producers already have alcohol-free options that they have been ramping up for years. In 2023, for instance, Constellation released a non-alcoholic version of Corona beer.

"The diversification has been happening as a result of consumers' potential thoughts about alcohol's effect on their health," Bernot said.

Murthy's advisory came right as many drinkers are trying to cut back on their alcohol consumption in the new year or embarking on a Dry January.

That's a potential win for many other brands that make alcohol-free beer, wine, gin, and other drinks.

The CMO of non-alcoholic spirit brand Spiritless, Tom Santangelo, told BI he sees these comments as the "front end of a tipping point."

"My guess is that for a lot of America, this surgeon general statement is kind of the message they need to come to a realization that this is something serious," Santangelo said.

He said the industry has already grown significantly in the last few years as alcohol moderation and abstention have become increasingly normalized. Similar to cigarettes, change may not come quickly, but he said, "It's a message that's going to carry a lot of weight."

Milan Martin, the CEO of non-alcoholic spirit brand The Free Spirits Company, told BI that the US Surgeon General's comments are another "nugget" of insight that will contribute to cultural change around drinking.

"All of these teeny little nuggets sit in our minds and sit there at the point where we're ready to order our third drink and impact our choice," Martin said, adding that conversations among peers and in the media around drinking are contributing to changes in drinking culture.

Athletic Brewing, which sells non-alcoholic beer, similarly said that while it is "aware of the ongoing discussions about alcohol and health," it "has never been anti-alcohol."

"We believe the alcohol and non-alcoholic sectors are synergistic," the company told BI.

Innovative soft drinks, from seltzer to kava, could benefit

Besides alcohol-free beer and cocktails with all the ingredients other than the, well, alcohol, there are other beverages that have attracted attention from the sober-curious — and could benefit if people cut back on booze.

Celebrity seltzer and soda brands often pitch themselves as upscale, healthier soft drinks, BI reported last year.

Others have turned to kava, a beverage that's common to the Pacific and is supposed to help you relax and put you in a better mood. While the most authentic kava is served on its own, brands that have added juice, sugar, and coloring before canning it have popped up over the last few years. Some point to their kava as a healthier choice than a cold beer or cocktail.

Cannabis products could become more attractive

People looking to cut back on alcohol sometimes turn to cannabis as a replacement, especially as governments loosen restrictions. That could be good news for makers of everything from CBD-infused beverages to marijuana dispensaries. Cannabis company Canopy Growth, for example, rose more than 2% Friday.

In 2022, the number of daily or near-daily cannabis users outpaced the number of daily or near-daily drinkers, research from Carnegie Mellon University found.

Some states, such as Minnesota and Texas, already allow liquor stores to sell drinks that contain THC, the main psychoactive component in marijuana, right alongside liquor.