A Sobering Reality: Trump Threatens EU Alcohol Tariffs
Wine, Champagne and spirits could be among the latest victims of the ongoing tariffs frenzy.
That's if US President Donald Trump follows through with his threats to impose a 200% tax on alcohol products being imported from the European Union.
It comes after the EU revealed plans to slap a 50% tariff on bourbon whiskey coming from the US, which was, in itself, a response to Trump’s 25% tariffs on steel and aluminium imports, which came into effect earlier this week.
Taking to Truth Social, the President labelled the EU "one of the most hostile and abusive taxing and tariffing authorities in the world," formed "for the sole purpose of "taking advantage of the US".
Calling the whiskey tariff "nasty," Trump added: "If this Tariff is not removed immediately, the US will shortly place a 200% tariff on all wines, champagnes and alcoholic products coming out of France and other EU-represented countries.
"This will be great for the wine and Champagne businesses in the US."
Immediate impact
European shares retreated on Thursday as worries over the impact of a trade war dampened investor sentiment.
France’s CAC 40 index surrendered early gains to close 0.3% lower, while Germany’s DAX index fell by 0.6%.
Shares in premium beverage giant were among the hardest hit, with Pernod Ricard tumbling by almost 4% and Rémy Cointreau seeing a 3.5% decline.
LVMH, the luxury conglomerate behind Moët & Chandon, also slipped 1.4%, while Heineken was also trading more than 1% lower.
Ultimately, the markets reflect broader concerns over the ongoing trade war's impact, as fears over a recession continue to rise.
'Productive' talks
It's been another turbulent week for global trade, with President Trump pushing the button on imposing a 25% tariff on all steel and aluminium imports into the US.
Then, the relationship between the US and Canada came under further strain as the latter announced a hike in electricity prices for power exported to the US. Trump's reaction was to threaten to double the tariff on Canadian imports.
On Thursday, US Commerce Secretary Howard Lutnick met with Canadian Finance Minister Dominic LeBlanc and Ontario Premier Doug Ford to discuss metals tariffs, along with economic and national security matters.
Despite failing to find a resolution, Ford later told reporters the talks were "very, very productive," adding: "We feel the temperature is being lowered." He also confirmed plans for another meeting next week.
The EU's stance
The European Union's response to Trump's tariffs "frenzy" has been to impose counter-tariffs on US goods valued at approximately US$28.3bn.
Set to take effect on April 1, these measures could significantly reshape transatlantic trade relations.
"Tariffs are taxes," European Commission President Ursula von der Leyen recently stated. "They are bad for business and even worse for consumers. These tariffs are disrupting supply chains and creating economic uncertainty.
"The European Union must act to protect consumers and businesses. The countermeasures we are implementing are strong but proportionate."
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