President Donald Trump is now threatening to impose a 200% tariff on European alcohol.

Beginning March 4, Trump had reinstated 25% tariffs on Canada and Mexico, according to NBC News.

According to the Council on Foreign Relations, tariffs are a tax imposed on foreign-made goods paid by the importing business to its home country’s government.

Canada responded to the tariffs by announcing plans to impose 25% tariffs against $155 billion worth of American goods, according to Canadian Prime Minister Justin Trudeau in his speech.

According to the Wall Street Journal, the United States also added another 10% tariff on China, to which they responded with a retaliatory tariff on U.S. agricultural goods.

“Economists say American importers and businesses will likely pass along the cost of tariffs to consumers, meaning individuals are likely to see higher prices at grocery stores and car dealerships,” the Wall Street Journal said.

The U.S. could be impacted by tariffs affecting prices in grocery stores, housing and car prices including the Commonwealth, according to the Wall Street Journal.

Gov. Andy Beshear commented on his concerns facing Kentucky’s raising prices on X, formerly known as Twitter.

“It’s going to make our lives as the American people that much more difficult and everything that much more expensive,” Beshear said. “One person made this decision, it’s a bad decision and they (Trump) can ultimately undo this decision.”

Kentucky Sen. Morgan McGarvey sent a letter to Trump stating his “grave concern” over the tariffs impacting the Commonwealth, where he said not to proceed with the executive order.

According to the letter, the tariff would negatively affect the bourbon industry, which contributes $9 billion to the Commonwealth’s economy.

McGarvey said several jobs in Kentucky would be affected by tariffs, including farmers, distillery workers, truckers and coopers, craftsmen who create wooden containers.

“Kentuckians know that is true because we lived through the collateral damage of the trade wars of your (Trump’s) first term when American whiskey exports dropped by 20%,” McGarvey said.

With Kentucky having several car manufacturing businesses including Toyota South in Richmond, companies are facing concerns with cost increases, according to WKYT.

Steve Gates, owner of Toyota South, said he could not work with a 25% tariff for his business.

Gates said that with these imposed tariffs, automakers will have to offset the prices of shipments, which would impact customers in the form of higher car prices.

“We’ve been through world wars and depressions, so we can survive this, and we can make it worthwhile for our guests,” Gates said. “We just need to know what we’re working for, around and with.”

Beshear said impacts amongst customers and business prices will occur in Kentucky’s car industry, affecting the Commonwealth’s economy.

“Look at Martinrea, on the auto industry, this is a Canadian company where parts go from Canada to Hopkinsville, Kentucky, to Mexico, and back,” Beshear said. “If these tariffs are ultimately put on the auto industry, and a company like that, it’s gonna hurt exports. It’s gonna hurt our economy.”

Economic experts such as Greater Louisville Inc. said they were concerned about effects on the Commonwealth.

“We expect the impacts to be felt primarily in agriculture, energy, manufacturing and bourbon as well,” President and CEO of Greater Louisville Inc. Sarah Davasher-Wisdom said.

According to Ashli Watts, president and CEO of Kentucky Chamber of Commerce, tariffs have never worked for businesses in Kentucky and trade has been beneficial for corporations.

“I can say with pretty much certainty that there would be layoffs,” Watts said. “We don’t know exactly how it will impact every single business, but when businesses are hit that hard with that high of a tariff, we are likely to see a dip in the economy. And of course, that would result in potential job loss.”

Companies such as Lexington’s Ethereal Brewing are taking action to increase their production in preparation for new markets, according to Brandon Floan, co-owner of Ethereal Brewing.

Floan said he was prepping due to a majority of their malt for beers coming from Canadian imports.

“We’re a small business, and we’re usually the first people who are impacted by these kinds of changes,” Floan said.

According to Floan, Canadian imports, prices on malt, would significantly become more expensive, specially for local businesses.

“Big corporations where we buy our stuff are always going to make their money,” Floan said. “And we’re the ones who have to heed that price increase.”

Vice President of Federal Tax policy at the Tax Foundation, Erica York, said there is still uncertainty with increases in tariffs, but increases in prices in goods and services are possible during this change.

York said if tariffs go into effect, it will create a higher tax burden for Americans.

“There’s no winning a trade war,” York said.