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President Donald Trump has intensified the global trade conflict by threatening a 200% tariff on wine, champagne, and other alcoholic products from the European Union. This announcement, made on his Truth Social platform Thursday, represents a significant escalation in the burgeoning trade war between major economic powers.
The threatened tariff comes in direct response to the EU's planned 50% levy on American bourbon whiskey, set to take effect April 1. Trump described this EU action as "nasty" and demanded its immediate removal to avoid his retaliatory measures.
"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 wrote. He added, "This will be great for the Wine and Champagne businesses in the U.S."
This latest confrontation follows the implementation of Trump's 25% tariffs on steel and aluminum imports from the EU, Canada, Mexico, and China, which took effect Wednesday. The EU had announced a €26 billion response package to these metal tariffs.
European officials have vowed to stand firm against what they view as economic intimidation. French Foreign Trade Minister Laurent Saint-Martin stated plainly on X: "We will not give in to threats. Donald Trump is escalating the trade war he chose to unleash."
Financial markets have reacted negatively to the escalating tensions. European shares fell Thursday, with France's Cac 40 index dropping 0.3% and Germany's Dax declining 0.6%. Major European alcohol producers saw significant losses, with Pernod Ricard falling nearly 4% and Rémy Cointreau declining 3.5%.
In New York, the S&P 500 dipped 0.7% after opening, continuing a troubling trend of market declines since Trump's tariff announcements began. Treasury Secretary Scott Bessent attempted to downplay these losses, telling CNBC, "I'm not concerned about a little bit of volatility over three weeks."
Economists widely reject Trump's central argument that tariffs will help bring back American jobs. Many warn that the expanding trade conflict could push the U.S. economy into recession. Goldman Sachs recently increased its recession probability from 15% to 20%, while Moody's Analytics raised its estimate to 35%.
The international response has been swift and substantial. Canada has announced retaliatory tariffs on $20.7 billion in U.S. goods, while China has imposed duties on American agricultural products.
Nicolas Ozanam of the French wine and spirits exporters' federation expressed frustration shared by many in affected industries: "We are fed up with being systematically sacrificed for issues that are unrelated to us."
