Almonds, whiskey, auto parts: EU's retaliatory tariffs set up these U.S. states and local products as the biggest losers

The recent data on tariffs and consumer decision-making is clear: raise prices on a product due to higher import taxes, and consumers will turn to a cheaper alternative.

That doesn't bode well for certain U.S. products, and the states where they are produced, as the U.S. and EU engage in tit-for-tat tariff threats. Think California almonds, Tennessee whiskey, and rearview mirrors from Michigan.

From 2017-2019, Tennessee whiskey exports to the European Union dropped from $362 million to $220 million amid President Donald Trump's first term trade war, and exports remained low until the retaliatory tariffs were suspended, according to a recent research report from Trade Partnership Worldwide. The 2018 Trump tariffs were suspended by the Biden administration in January 2022.

"Once the EU lifted the tariffs, Tennessee's whiskey exports increased 42% in the year after," said Daniel Anthony, president of Trade Partnership Worldwide. "But Tennessee exporters know how retaliation could again reduce sales."

On Thursday, Trump threatened 200% tariffs on EU wine and alcohol, and said he "is not going to bend at all" when it comes to U.S. tariffs levied on other nations' imports. His Treasury Secretary, Scott Bessent, told CNBC he doesn't understand why the markets would make a big deal out of this threat, but for some U.S. states, the EU is a big market.

Unlike the tariffs imposed by the Trump administration, where U.S. shippers have to pay the tariffs in order to receive their products, reciprocal tariffs would be imposed on U.S. exports which are paid by EU importers. The higher prices could either drive down demand or shut down a market.

"There is an expectation companies will lose sales as EU consumers shift to less expensive