President Donald Trump is threatening to impose 200 percent tariffs on alcohol products from the European Union, escalating his trade war against the bloc after it announced retaliatory tariffs on the U.S. Wednesday.
Trump floated 200 percent tariffs Thursday on European wine, champagne, and other alcohol products in response to the EU’s 50 percent tariff on American whiskey, a tax that the industry expects to have a negative impact on U.S. distillers and farmers.
“If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.,” Trump said on Truth Social.
European wine production represents a significant portion of the total global market. In 2020, vines were grown on 3.2 million hectares of EU land, about 45 percent of the world’s total wine growing area, according to European Commission data. France, Italy, and Spain are responsible for the bulk of European wine production, with particular regions of each country specializing in making it.
Trump subsequently posted on Truth Social about the U.S getting ripped off in trade deals and the Wall Street Journal’s position on the EU trade war, a view Trump strongly disagrees with. Trump celebrated drops in egg prices, oil prices, and interest rates, while insisting his newly enacted tariffs are already bringing in large amounts of tax revenue.
The EU announced its plan to impose $28 billion of reciprocal tariffs on a range of U.S. products next month to counter Trump’s 25 percent steel and aluminum tariffs. In the meantime, EU officials said they are open to negotiations with the U.S. to remedy the situation and voiced regret about having to institute tariffs.
America’s mounting trade war with Europe comes after Trump doubled tariffs on Canadian steel and aluminum earlier this week, escalating the trade conflict between the U.S. and its neighbor to the north. Incoming Canadian prime minister Mark Carney said Tuesday that Canada would respond forcefully and promised to maintain retaliatory tariffs until the U.S. backs down from its fight.
For the time being, the Trump administration has carved out loopholes around the president’s 25 percent universal tariff on Canadian and Mexican goods. Goods covered by the U.S.-Mexico-Canada agreement are temporarily exempt from Trump’s tariffs, meaning roughly 50 percent of Mexican imports and 36 percent of Canadian imports will not be impacted. The White House created the tariff loopholes because of worries about how the instability could impact auto supply chains.
Most economists believe tariffs will create prices increases for American consumers and impacted industries, potentially hampering Trump’s ability to reduce the inflation he inherited from the Biden administration. Markets have reacted negatively to Trump’s tariffs with stock indexes dropping precipitously earlier this week because of Trump’s saber rattling.
Trump has called “tariff” his favorite word in the dictionary and his affection for them dates back to the beginning of his political career. Trump insists the tariffs on Canada and Mexico are necessary to prevent fentanyl trafficking into the U.S. and increase law enforcement cooperation at the southern border. Both neighboring countries gave Trump border security concessions in February to delay the president’s planned tariffs for a month in deals that Trump celebrated as major victories.