Donald Trump has threatened a 200% tariff on wine and champagne from European Union countries, in the latest threat of escalation in the global trade war started by the US president against the country’s biggest trading partners.
Trump said in a post on Thursday on his Truth Social platform that the tariffs on all alcoholic products from the bloc would be retaliation for a “nasty” 50% levy on American bourbon whiskey announced by the EU.
The EU’s action against bourbon whiskey – due to come into force on 1 April – was itself part of a €26bn ($28bn) response to Trump’s 25% tariffs on steel and aluminium imports, which came into effect on Wednesday.
Trump claims the US’s trading partners have taken advantage of the US and that tariffs will help him to bring back jobs – a theory that is roundly rejected by most mainstream economists.
The tariffs on the EU, Canada, Mexico and China – and those imposed in retaliation – threaten to tip the US economy into recession, and Trump has admitted there may be a “period of transition” while businesses start producing more in the US.
The White House has so far shrugged off the concerns of investors, after his tariff announcements were greeted with heavy stock market sell-offs that have wiped out all of the share price gains since his election in November.
Despite starting the trade war, Trump appeared to be infuriated by the EU’s retaliatory measures.
He wrote: “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.,” he added.
The US already circumvents the protected geographical origin rules on European products – American supermarkets are full of US-made imitations of champagne and other delicacies such as parmesan and gorgonzola.
Senior figures in Europe vowed to hold firm. “We will not give in to threats,” the French foreign trade minister, Laurent Saint-Martin, wrote on X. “Donald Trump is escalating the trade war he chose to unleash.”
France was “determined to retaliate” and would “always protect our sectors”, he added.
Trump wrote on Thursday: “The U.S. doesn’t have Free Trade. We have “Stupid Trade.” The Entire World is RIPPING US OFF!!!” Channeling the former US president Franklin D Roosevelt, he added: “The only thing you have to fear, is fear itself!”
In France, independent winemakers represent 60% of the country’s wine production. They are watching closely to see how the dispute plays out. “We’re very prudent at this stage,” said Jean-Marie Fabre, who makes wine in Fitou in the south of France.
French winemakers were concerned they could be swept into the broader tariff row, and had feared tit-for-tat measures when the EU announced retaliatory tariffs on some American products, including US whiskey.
“The entire wine sector has been through a succession of crises of different kinds which have already really tested us, including the Covid crisis, inflation, the war in Ukraine and the climate issues,” said Fabre, who is also head of the Independent Winemakers of France. “Winemakers, whatever their size, but particularly small winemakers, have found themselves in a fragile position.”
European shares fell on Thursday, amid concerns over the impact of a trade war. France’s Cac 40 index gave up morning gains to fall by 0.3%, while Germany’s Dax index fell by 0.6%.
Leading European drinks giants came under pressure. Shares in Pernod Ricard fell almost 4% and Rémy Cointreau declined 3.5%. LVMH, owner of Moët & Chandon, slipped 1.4%.
In New York, the benchmark S&P 500 dipped 0.7% after Wall Street opened for trading. Trump’s officials have attempted to brush off days of stock market declines, claiming they are not worried about it.
“We’re focused on the real economy,” the treasury secretary, Scott Bessent, said during his latest interview on CNBC news network, a fixture on Wall Street. “I’m not concerned about a little bit of volatility over three weeks.”
When asked if he could rule out a recession, vice-president JD Vance said in a Fox News interview yesterday that “you can never predict the future”, but noted that he believes the economy is strong.
Trump also repeated a longstanding criticism of the EU, that the trading bloc “was formed for the sole purpose of taking advantage of the United States”, calling it “one of the most hostile and abusive taxing and tariffing authorities in the world”.
Ursula von der Leyen, the president of the European Commission, the EU’s executive, said on Wednesday that trade between Europe and the US “brought prosperity and security to millions of people, and trade has created millions of jobs on both sides of the Atlantic”.
