Estimated read time: 3-4 minutes
- Trump threatens a 200% tariff on EU alcohol in retaliation to EU tariffs.
- The EU imposed a 50% tariff on U.S. whisky, sparking Trump's response.
- Economists warn of potential U.S. inflation and recession due to trade tensions.
SALT LAKE CITY — Following a European Union announcement of new tariffs going into effect on April 1 in response to U.S. levies on steel and aluminum that began Wednesday, President Donald Trump upped the ante Thursday, threatening an additional 200% tariff on EU wine and spirits.
In a posting to Truth Social, Trump painted EU trade policy as hostile to the U.S. and said the new surcharge on EU alcohol exports would go into effect unless the group of 27 European countries withdrew their own alcohol tariff.
"The European Union, 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, has just put a nasty 50% Tariff on Whisky," Trump wrote in a posting to Truth Social early Thursday morning. "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."
In 2024, the U.S. imported roughly $5.4 billion in wine from the EU, which includes about $1.7 billion in sparkling wines, according to Census Bureau data, per a report from the Wall Street Journal . It also imported more than $1 billion of beer and more than $3.5 billion of spirits such as vodka, gin and whiskey last year.
Canada, by far the biggest foreign supplier of steel and aluminum to the U.S., announced 25% retaliatory tariffs on those metals along with computers, sports equipment and other products worth $20 billion in total, per a report from Reuters. Canada has already imposed tariffs worth a similar amount on U.S. goods in response to broader tariffs by Trump.
Trump remains bullish on tariff policy
In comments to reporters Thursday during a White House Oval Office meeting with NATO Secretary General Mark Rutte, Trump reiterated his commitment to the new tariff policies.
"I'm not going to bend at all," Trump said, per a report from CNBC. "We've been ripped off for years, and we're not going to be ripped off anymore," he said.
Trump has announced, then paused, a number of new tariff policies in the past few weeks with only the new 10% increase on Chinese goods taking effect in February. On Wednesday, Trump's sector-specific levy of 25% on all imported steel and aluminum went into effect.
European Commission President Ursula von der Leyen said Thursday that the EU trade commissioner would be having a phone call Friday with his U.S. counterpart, according to The Associated Press.
"We don't like tariffs because we think tariffs are taxes and they are bad for business and they are bad for consumers," von der Leyen said. "We have always said at the same time that we will defend our interests. We've said it, and we've shown it, but at the same time I also want to emphasize that we are open for negotiations."
U.S. investment markets reacted negatively to Thursday's international trade salvos, with the Dow Jones, S&P 500 and Nasdaq all in negative territory just ahead of the close of regular trading Thursday.
The market negativity continues the week-long trend that kicked off Monday with the tech-heavy Nasdaq composite posting its biggest single-day losses since 2022, while the S&P 500 had its worst day so far this year.
A growing number of economists are expressing worries that the escalating global trade war could drive up U.S. inflation and potentially push the economy into a recession.
"The president is in a tight spot, and every tariff (or threatened tariff) makes his position more difficult," Simon Johnson, professor of global economics and management at MIT, told CNN. "If he keeps going in this direction, prices will rise and the economy will slow even further."
