Thu, 13 Mar 2025

Thu, 13 Mar 2025 Trump threatens EU wine and spirit tariff as trade war escalates

Wine and spirits will be taxed, Trump says, if the EU does not remove tariffs on US whiskey.
The threat is part of a cycle of retaliation that began when Trump imposed tariffs on all steel and aluminum imports to the US, prompting the EU to retaliate with its own tariffs, including a 25% tax on American whiskey. EU officials have confirmed that talks are being prepared between the US and EU to discuss the situation, with European Commission spokespersons saying that trade commissioner Maroš Šefčovič has reached out to his American counterparts in response to Trump's threat. The stand-off is part of an ongoing trade war that has ruffled financial markets and raised concerns over its impact on economies and consumers worldwide. The EU sends more than €4.5bn worth of wine each year to the US, its largest export market, and industry leaders warn that a 200% tariff would destroy the market, costing thousands of jobs. The latest clash is part of a cycle that played out during Trump's first term when he announced tariffs on steel and aluminum imports from the EU. In response, the EU imposed tariffs on American whiskey, leading to a significant drop in sales for US whiskey exports to the EU. Trump has shown little appetite for deal-making so far, at least when it comes to steel and aluminum, and industry leaders warn that the proposed tariff would have catastrophic consequences for businesses such as wine importers like Mary Taylor, who brings in 2 million bottles each year. The escalation of tariffs has led to a decline in shares on Wall Street, with the S&P 500 dropping nearly 1.4% and other major indices also experiencing losses. In Europe, London's FTSE 100 was flat while Germany's Dax ended about 0.5% lower. White House officials have blamed the EU for escalating the dispute, with Commerce Secretary Howard Lutnick describing it as "off the topic" to target Kentucky bourbon or Harley-Davidson motorcycles.
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