Trump threatens 200% tariff on alcohol from EU

U.S. President Donald Trump has threatened to impose tariffs of up to 200% on any alcoholic beverages imported into the U.S. from the European Union (EU), marking a resurgence of the escalating trade war. This move is a response to the EU's planned 50% import tax on American-made whiskey, which itself was retaliation for Trump's tariffs on all steel and aluminum imported into the U.S.

President Trump called for the immediate removal of the EU's "disgusting" tariffs on American whiskey, referring to the EU as a "hostile and abusive" group that was "formed for the sole purpose of taking advantage of the U.S." He stated that if the EU does not immediately remove the tariffs, the U.S. will impose 200% tariffs on all wines, champagnes, and alcoholic products from France and other EU member states.

A European Commission spokesperson stated that a "call" is being prepared between the U.S. and the EU to discuss the current situation. The spokesperson confirmed that EU Trade Commissioner Maroš Šefčovič had "been in contact with his U.S. counterparts" following Trump's latest threat. Comité Européen des Entreprises Vins, a European wine industry representative organization, said that Europe exports over 4.5 billion euros (approximately $4.89 billion USD) of wine to the U.S. annually, making the U.S. its largest export market.

Ignacio Sánchez Recarte, Secretary-General of the organization, stated that if Trump implements his threat, it will destroy the market and lead to the loss of thousands of jobs. He pleaded with both sides to "keep wine out of this dispute," stating that "there is no alternative to sell all this wine." Mary Taylor, a U.S. importer of European wines, said that the measures would be catastrophic for her business and the industry, and would ripple through restaurants, bars, and distributors across the U.S. "This feels like a huge threat to our livelihood," she said.

This standoff marks a renewed escalation of the trade war, which has already disrupted financial markets and raised concerns about the impact on the economies and consumers of many countries around the world, including the U.S. European Central Bank President Christine Lagarde, in an interview on the BBC's HARDtalk program, stated that the EU has "no choice" but to retaliate. She added that she expects the two sides to sit down and negotiate. "If this dispute escalates into a full-blown trade war, everyone will suffer," she warned.

Former Trump advisor Stephen Moore, now an economist at the Heritage Foundation, said he believes the EU will have to make concessions to defuse the situation, noting that Trump has consistently expressed concerns about agricultural product rules. "It will absolutely end with a deal," he said. "The question is just whether it ends with a deal in a day, a week, a month, or six months, but it will ultimately end with a negotiated solution."