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Investing.com -- The European Union is going after U.S. whiskey with 50% tariffs following the U.S.'s recently announced 25% tariffs on steel and aluminium. In response, U.S. President Donald Trump is going after all European alcoholic beverages.  One company caught in the middle is Jack Daniels maker Brown Forman (NYSE:BFb).

Shares of Brown-Forman fell 5.5% on Wednesday after the European Union said it would move forward with a 50% tariff on American whiskey.  The new EU tariff will go into effect on April 1, one day before Trump’s reciprocal tariffs.

However, Trump snapped back at the move on Thursday, calling the EU tariff “nasty” and threatening his tariffs on alcoholic beverages from EU countries like France.

Trump said the U.S. will now place a 200% tariff on all wine, champagnes, and other alcoholic products coming from France and other EU countries.

“The European Union, one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States, has just put a nasty 50% Tariff on Whisky,” Trump said on his Truth social media. “If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES,&ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.”

The move by Trump is tricky for Brown-Forman, which sells 45% of its products in the U.S. but 55% outside the U.S. in over 170 different countries.  Jack Daniel’s products are the company’s most valuable asset.

Navigating tariffs, however, is not new for the company.

In response to U.S. tariffs in 2018 on steel and aluminum, the European Union and the United Kingdom (TADAWUL:4280) imposed retaliatory tariffs on U.S. imports, including on American whiskey products.  The EU tariffs at that time were 25%, half of the currently proposed 50%.

According to data from the Distilled Spirits Council of the United States, the EU tariffs previously imposed on American whiskey led to a 20% drop in exports, declining from $552 million in 2018 to approximately $440 million in 2021. Following the suspension of these tariffs, exports surged to $705 million in 2023.

Brown-Forman confirmed that the prior EU/UK tariffs negatively impacted their business until they were removed or suspended in late fiscal year 2022 and early fiscal year 2023, positively affecting the company’s results during fiscal year 2023.

Shares of Brown Forman are up 2% in early trading Thursday following Trump's retaliatory response to the new proposed EU tariffs.

This content was originally published on http://Investing.com