President Donald Trump has vowed to escalate his unprovoked trade war by unilaterally imposing taxes on Americans’ purchases of alcoholic beverages imported from European Union countries if the 27-member bloc dares to enact a retaliatory tariff on American-made whiskey.
In an early-morning post on his Truth Social platform, Trump falsely claimed that the EU — which originated as a customs union to strengthen intra-continental ties in the wake of the Second World War — was “formed for the sole purpose of taking advantage of the United States” and called the body “one of the most hostile and abusive taxing and tariffing authorities in the world”.
Trump said a 50 per cent tariff on Kentucky bourbon imposed by the EU as a result of his decision to place 25 per cent import taxes on American purchases of EU imports including automobiles — was “nasty” and demanded it be rescinded “immediately” or he would place a 200 per cent tax on “all wines, champagnes, [and] alcoholic products coming out of France and other EU represented countries”.
The president added that the 200 per cent surcharge on any imported alcohol would be “great for the wine and champagne businesses in the US” – even though there is no champagne business in the States because champagne is produced exclusively in the French region of the same name.
In a separate post a short time later, Trump repeated his false claim about the European Union’s history while attacking The Wall Street Journal for editorializing against his unprovoked trade war against American allies. He accused the broadsheet of being “owned by the polluted thinking of the European Union, which was formed for the primary purpose of ‘screwing’ the United States of America” and claimed the US will soon “win on everything” because “tariff-related money is pouring into the United States”.
He later added that the “entire world is ripping us off” because the United States has “stupid trade” rather than “free trade”.
The possibility of a 200 per cent federal surcharge on any American’s purchase of wine or other alcohol coming from Europe could indeed drive consumers to purchase American-made wines.
And if such a tax is imposed, the resulting windfall to American wineries could boost the bottom line of at least one member of Trump’s own family.
In 2011, Trump’s middle son, Eric Trump, purchased the Kluge Estate Winery and Vineyard in Albemarle County Virginia and renamed it the Trump Winery in 2012. The 227-acre facility is the largest vineyard in Virginia by acreage and produces approximately 36,000 cases of wine per year. Last year, the vineyard expanded its offerings to include ciders produced by the eponymously named Trump Cidery.
The tariff threats against EU alcohol products are the latest in a series of threatened tax increases from Trump that have roiled American stock markets and left investors and business leaders fearful that the president’s policies will send the American economy sliding into a recession.
Nearly all reputable and legitimate economists warn that tariffs are inflationary and could harm the government’s efforts to lower prices after a spike in inflation caused in part by the long-term effects of the Covid pandemic on supply chains.
But treasury secretary Scott Bessent told reporters at the White House on Thursday that he’s unconcerned about whether tariffs could have a negative impact on Americans’ wallets.
“I'm not concerned about the short term. I think we’ve had a big unwind and got strategic industries ... We’ve got to protect the American worker that a lot of these trade deals haven’t been fair,” he said.
Bessent claimed that the “economic story of the day” should instead be the possibility that Republicans — who control both the House and Senate — won’t be able to pass legislation to keep the government funded past Friday. He blamed that possibility on the Democrats, who don’t control the agenda in either chamber because they don’t control a majority of seats.
Earlier in the week, the House passed a Republican-authored bill to continue funding much of the government at fiscal year 2024 levels through September 30 while cutting funds to a number of initiatives enacted under the Biden administration and forcing sweeping cuts to public services in the district of Columbia.
Senate Democrats, eight of whom would need to join with the GOP to pass the Republican-authored House bill, have declined to endorse the partisan proposal and have called for a month-long extension of funding to allow for bipartisan talks which the Republican leaders in the House and Senate have thus far refused.
“I can tell you what's not good for the economy is this government shutdown. I don’t know what Democrats are thinking here, because they’re going to own it,” he said. “We’ve had incredible Republican unity since January 20, and the fact that the Democrats are in disarray, they’re failing, and this is the best they can do ... I think this is the economic story for the next few days, not the tariffs.”
