Trump threatens 200% tariff on alcohol from EU

US President Donald Trump has threatened a 200% tariff on any alcohol coming to the US from the European Union (EU) within the newest twist of an escalating commerce conflict.

The risk is a response to the EU’s plans for a 50% tax on imports of US-produced whiskey as a part of its retaliation to Trump’s tariffs on all metal and aluminium imports to the US.

The US president known as for the quick elimination of the EU’s “nasty” tariff on US whiskey, calling the bloc “hostile and abusive” and “shaped for the only objective of benefiting from the US”.

A European Fee spokesperson mentioned that “calls are being ready” between between the US and the EU to debate the scenario.

It confirmed that its commerce commissioner, Maroš Šefčovič, had “reached out to his American counterparts” after Trump’s newest risk.

The stand-off marked one other escalation of a commerce conflict which has rattled monetary markets and raised considerations over the impression on the economies and shoppers in lots of international locations around the globe, together with the US.

Europe sends greater than €4.5bn ($4.89bn; £3.78bn) value of wine annually to the US, which is its largest export market, in response to the Comité Européen des Entreprises Vins, which represents the European wine business.

Ignacio Sánchez Recarte, secretary-general of the group, mentioned if Trump carried by on his threats, it will destroy the market, costing hundreds of jobs.

“There is no such thing as a various to promote all this wine,” he mentioned, pleading with the 2 sides to “maintain wine out of this battle”.

The newest conflict got here after new US tariffs on metal and aluminium got here into impact on Wednesday, hitting imports of the metals with a blanket responsibility of 25% and ending exemptions from the duties that the US had beforehand granted for shipments from some international locations, together with from the EU and Canada.

Canada and Europe – that are amongst America’s greatest commerce companions – known as the brand new taxes unjustified and struck again with their very own tariffs on a variety of US merchandise. The EU’s measures are due to enter pressure 1 April.

The conflict reprises a battle that performed out throughout Trump’s first time period, when he first introduced tariffs on metal and aluminium.

The EU responded with its personal tariffs, together with a 25% tax on American whiskey.

Within the aftermath, whiskey gross sales to the EU dropped 20%, falling from roughly $552m in 2018 to $440m in 2021, in response to the Distilled Spirits Council of the US. Trump in flip

The tariffs have been lifted after Trump left workplace, after the 2 sides reached an settlement that exempted a specific amount of European metals from the duties.

However Trump has indicated little urge for food for deal-making thus far, at the least relating to metal and aluminium.

“If this Tariff just isn’t eliminated instantly, the US will shortly place a 200% Tariff on all wines, champagnes & alcoholic merchandise popping out of France and different EU represented international locations,” he wrote on social media, utilizing all capital letters for a number of the message.

The focusing on of wine and whiskey is symbolic – there are few client items extra iconic than French Bordeaux or Tennessee whiskey. From a price standpoint, drinks commerce is value lower than a number of the different gadgets dealing with tariffs.

However Mary Taylor, a US-based importer of European wines, mentioned the measures can be catastrophic for her enterprise and business, with an impression that might ripple out to eating places, bars and distributors throughout the US.

“It simply appears to be like like a giant, big risk to our livelihoods,” she mentioned.

Ms Taylor, who brings in 2 million bottles a yr, weathered the 25% tariff Trump placed on sure EU bottles throughout his first time period by increasing her distribution in Europe, however she mentioned, “200% is a complete completely different ball sport”.

Shares within the US fell once more on Thursday.

The S&P 500 dropped almost 1.4%, taking it down roughly 10% from its most up-to-date peak – a milestone generally known as a correction. The Dow slumped 1.3%, whereas the Nasdaq dropped nearly 2%.

In Europe, London’s FTSE 100 was flat, whereas Germany’s Dax ended about 0.5% decrease.

In Paris, the Cac 40 fell 0.6%, as shares of main spirit-makers have been hit, with Pernod Ricard down 4% and Hennessy cognac maker LVMH falling 1.1%.

In interviews with US enterprise media on Thursday, White Home officers blamed the EU for escalating the dispute.

“Why are Europeans choosing on Kentucky bourbon or Harley-Davidson bikes? It is disrespectful,” Commerce Secretary Howard Lutnick informed Bloomberg Tv, describing the back-and-forth as “off the subject”.

Treasury Secretary Scott Bessent warned {that a} commerce conflict was prone to inflict extra financial ache on the EU than on the US, dismissing considerations that the conflict might spiral.

“One or two gadgets, with one buying and selling bloc – I am undecided why that is a giant deal for the markets,” he mentioned.

In an interview with the BBC’s HardTalk, European central financial institution president Christine Lagarde, mentioned that the EU had “no selection” however to retaliate.

“In the mean time, everyone is positioning,” she mentioned, including that she anticipated the 2 sides to take a seat down and negotiate.

“All people will endure” if the dispute have been to develop right into a full blown commerce conflict, she warned.

To this point, Trump has proven little tolerance for retaliation from international locations over the tariffs he has launched.

Earlier this week, he blasted Canada with the specter of a 50% tariff on its metal and aluminium after the Canadian province of Ontario responded to new tariffs with a surcharge on electrical energy exports to the US.

He rescinded that risk after Ontario agreed to droop the costs.

Former Trump adviser Stephen Moore, now an economist with the Heritage Basis, mentioned he thought the EU must make a concession to defuse the scenario, noting that Trump had persistently voiced considerations about guidelines on agricultural merchandise.

“Completely that is going to finish up with a deal,” he mentioned. “It is solely a query if it results in a deal in a day, per week, a month or six months, however there’ll finally be a negotiated settlement.”

The total HARDtalk can be out there from 14 March on the BBC Information Channel, iPlayer, the World Service and as a podcast.