TRUMP THREATENS 200% TARIFF ON EUROPEAN ALCOHOL AS TRADE WAR ESCALATES
By David Goldman, CNN
President Donald Trump on Thursday threatened to impose a massive tariff on European alcohol in response to the European Union’s retaliation against his steel and aluminum tariffs – a tit-for-tat escalation of a trade war that could easily get out of hand.
In a post on Truth Social, Trump said his administration would impose a 200% tariff on alcoholic beverages from the EU unless it rescinds the 50% tariff the European government imposed Wednesday on US spirits.
“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,” Trump said. “This will be great for the Wine and Champagne businesses in the U.S.”
America’s response to Europe’s response to America’s tariffs in the span of 36 hours shows how trade wars can quickly spiral out of control. After Trump’s 25% tariffs on aluminum and steel went into effect at midnight Wednesday morning, the EU immediately retaliated against what it called an “unjustified” trade action from the Trump administration.
The EU’s countermeasures included tariffs on €26 billion ($28 billion) worth of American goods, including tariffs on boats, bourbon and motorbikes. The measures, which are set to go into effect in April, are “swift and proportionate,” it said in a statement.
America’s spirits industry said Wednesday it was bracing for pain from the retaliatory tariffs.
The EU’s 50% tariffs on American spirits are “deeply disappointing and will severely undercut the successful efforts to rebuild US spirits exports in EU countries,” Chris Swonger, CEO of the Distilled Spirits Council of the United States (DISCUS), said in a statement released Wednesday.
‘Of course I will respond’
Trump said Wednesday in the Oval Office that he would respond to the EU’s retaliatory tariffs.
“Of course I will respond,” Trump said.
On Thursday, Trump called the EU “one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States.”
He called the retaliatory tariff it imposed on US bourbon “nasty.”
But the problem with retaliation is it invites more retaliation, with no easy way out and no end in sight. Trump has signaled he’s not ending his tariff plan anytime soon.
Despite growing pushback from Wall Street, Trump has threatened a wide range of additional tariffs, including reciprocal tariffs scheduled for April 2. Those looming tariffs, if they move forward, could trigger further retaliation.
American spirits in a slump
The US spirits industry has become a frequent target of retaliatory tariffs in each of Trump’s terms. Much of US bourbon and whiskey production is located in states that voted for Trump, including Kentucky and Tennessee.
Canada, for example, recently targeted Kentucky bourbon with tariffs in retaliation for Trump’s trade actions and threats against America’s northern neighbor. A number of Canadian retailers opted to pull American-made spirits off store shelves in response to Trump’s tariffs on Canada.
Last week, the CEO of Jack Daniel’s whiskey maker Brown-Forman blasted the tariffs, but said the decision to pull its spirits off stores shelves hurt even more.
This is a developing story and will be updated.