Washington, DC [US]: US President Donald Trump on Thursday warned of imposing a 200 per cent tariff on champagne and other alcoholic products from the European Union, escalating trade tensions between Washington and Brussels, according to ABC News.
Trump’s threat followed the EU’s announcement of tariffs on USD 28 billion worth of US goods, including a 50 per cent tariff on whiskey. The EU’s move was in response to previous US duties on steel and aluminum imports, which have been a significant point of conflict in transatlantic trade relations.
Urging the EU to withdraw its whiskey tariff, Trump warned that if the measure remained, the US would “shortly place” retaliatory tariffs on European alcohol products. He criticized the EU’s trade practices, calling it “one of the most hostile and abusive taxing and tariffing authorities in the World.”
European Commission President Ursula von der Leyen defended the EU’s move, stating that the bloc “must act to protect consumers and business.” The tariffs are part of the EU’s broader strategy to counterbalance the economic impact of US trade measures.
The latest tariff threats caused immediate ripples in financial markets. Stock futures declined early Thursday, reversing the previous day’s gains in the S&P 500 and Nasdaq. The Dow Jones Industrial Average also extended losses from Wednesday’s trading session.
This standoff is part of a broader global trade conflict. Canada had previously imposed tariffs on USD 20.7 billion worth of US goods in response to US steel and aluminum duties. Meanwhile, Trump’s administration recently doubled tariffs on Chinese imports to 20 per cent, prompting Beijing to retaliate with levies on US agricultural exports.
The escalating trade tensions have heightened concerns about a potential economic downturn. Last week, Goldman Sachs raised its recession probability forecast from 15 per cent to 20 per cent, while Moody’s Analytics adjusted its estimate to 35 per cent, citing risks from global trade uncertainty.