200% tariffs on Europe's wine, spirits threatened

WASHINGTON — US President Donald Trump on Thursday threatened to slap a 200 percent tariff on wine, cognac and other alcohol imports from Europe, opening a new front in a global trade war that has roiled financial markets and raised recession fears.

Trump's threat came in response to a European Union plan to impose tariffs on US whiskey and other products next month — which itself is a reaction to Trump's 25 percent tariffs on steel and aluminum imports that took effect on Wednesday.

Alcohol is shaping up to be a key friction point in the brewing trade war. Some Canadian retailers have pulled US bourbon from their shelves as relations between the two countries have frayed and Trump has threatened to annex that country.

Many of the EU's proposed countermeasures, worth 26 billion euros ($28.31 billion), would apply to products with little more than symbolic value, such as dental floss and bathrobes.

But the proposed 50 percent duty on US bourbon would be a significant hit for the industry, which has seen exports grow steadily since the United States lifted tariffs that Trump imposed during his first term in office.

The EU accounted for roughly 40 percent of all spirits exports in 2023, according to the Distilled Spirits Council of the United States, a trade group. Likewise, the United States accounts for 31 percent of EU wine and spirits exports, according to Eurostat.

Industry officials on both sides of the Atlantic urged their leaders to de-escalate. "This cycle of tit-for-tat retaliation must end now!" said spiritsEurope, an industry trade group.

Some economists say the uncertainty threatens the health of the US economy and raises the risk of recession. A Reuters/Ipsos poll released on Wednesday found that 70 percent of the US people expect Trump's tariffs to make regular purchases more expensive.

Agencies Via Xinhua