US President Donald Trump has vowed to impose a 200% tariff on wine, cognac, and other alcoholic drinks imported from Europe, further escalating an existing trade war that has shaken financial markets and sparked fears of an economic slowdown worldwide.
Trump made the announcement in retaliation for the European Union’s decision to impose tariffs on American whiskey and other American products next month. The move by the EU is a retaliatory measure following Trump’s recent 25% tariffs on imports of steel and aluminum, which were implemented on Wednesday.
“The Entire World is RIPPING US OFF!!!” Trump wrote on Truth Social, justifying his aggressive trade policy. The European Commission has not yet commented on the proposed alcohol tariffs.
The news sent the stock market into a negative spin, as investors were concerned with more disruption of global trade. Canadian retailers meanwhile have started removing American bourbon from their shelves in anticipation of escalating tensions. Canada, the US largest source of aluminum supplies, also announced retaliatory measures for Trump’s metal tariffs.
The EU’s suggested retaliatory duties totaling about €26 billion ($28.3 billion) are leveled against a variety of American products, such as bourbon, that could face a 50% increase in duty. US, for its part, represented 31% of EU wine and spirits exports in 2023. Trump asserted that his tariffs would help domestic producers, and his claim was fulfilled as US beverage firm stocks rose.
As it is, both sides’ industry officials called for cooler heads, but economic experts caution that ongoing tit-for-tat trade measures risk destabilizing global supply chains and fueling recession dangers. A Reuters/Ipsos poll conducted recently showed that 70% of Americans anticipated Trump’s tariffs leading to increased consumer prices.
In spite of volatility in the markets, Treasury Secretary Scott Bessent stood up for the administration’s trade policy, saying that the EU stands to lose more in an extended trade war because it is dependent on exports to the US.
