Trump threatens 200% tariff on Champagne and wine from Europe
The EU's tariff plan came in response to a set of US tariffs on steel, aluminum, and other related products that took hold on Wednesday.
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The 27-nation bloc explained that it would react to America's steel and aluminum tariffs in two waves: First, with tariffs as high as 50 percent on US products, including Harley-Davidson motorcycles and Kentucky bourbon, which will take effect on April 1; and second, a series of measures in mid-April that would target farm products and industrial goods that are important to Republican districts.
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European leaders have made it clear that they would prefer not to enact those measures, and would like to come to an agreement with Trump instead.
'Tariffs are taxes,' Ursula von der Leyen, the president of the European Commission, the bloc's executive arm, said in a statement on Wednesday. But with little progress toward a deal, EU leaders decided to hit back in politically sensitive product categories, hoping to inflict enough pain to drive Americans to the negotiation table.
European officials had anticipated that Washington might react, and some vowed on Thursday not to cave under that pressure.
'We will not give in to threats,' Laurent Saint-Martin, France's foreign trade minister, said in a post on the social platform X. Trump 'is escalating the trade war he chose to unleash,' he added.
The European Commission, which most directly drives trade policy for the economies in the bloc, did not have an immediate comment on Trump's post.
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But Olof Gill, a spokesperson for the commission, said Trade Commissioner Maros Sefcovic had reached out to his American counterparts after the EU's announcements Wednesday. Calls were 'being prepared,' he said.
This is not the first time the spirits and alcohol industry has been caught in a trans-Atlantic trade war. Less extreme tariffs were placed on liquor and other alcohol during Trump's first term, and the industry's recovery from that hit has been long and grueling.
Back then, the president threatened Champagne with tariffs, but did not follow through.
While it is not clear how much it mattered in that case, Bernard Arnault, France's richest man and head of the LVMH Moët Hennessy Louis Vuitton luxury empire, is a longtime friend of Trump's. He attended the president's recent inauguration.
Arnault's company is home to brands including Dom Pérignon, Krug, and Veuve Cliquot.
This time around, a range of alcohol industry executives have been lobbying in Washington, Brussels, and other European capitals to be spared — and have expressed alarm that they are once again caught in the crossfire.
Ulrich Adam, director general of the trade group spiritsEurope, called Trump's tariff threat on European alcohol a 'shocker.' The group aims 'to get spirits out of the middle of these unrelated disputes,' he added.
There seems to be little hope of an immediate reprieve. Trump stressed that the tariffs 'will be great for the wine and Champagne businesses in the U.S.'
Champagne, technically, is produced only in a specific region in France. About 16 percent of its total exports go to the United States, based on industry data from 2023, making America the largest importer of the sparkling wine.
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This is the second time this week that Trump has threatened to rapidly escalate a trade war against a close ally.
On Tuesday, Trump threatened to double the tariffs on Canadian steel and aluminum after the province of Ontario responded to his previous tariffs by putting a surcharge on electricity it exported to the United States.
Within hours, Ontario had suspended its surcharge, and Trump also walked back his threats. On Wednesday, he proceeded to tax Canadian steel and aluminum at the same 25 percent rate as other countries.
Governments have varied their responses to Trump's tariff threats.
China, the European Union, and Canada have quickly answered Trump's tariffs with levies of their own, encouraged by their domestic political constituencies to fight back or emboldened by leverage based on the size of their economies.
But governments in Australia, Brazil, Britain, Japan, and Mexico have chosen not to retaliate, at least for now, as they seek a deal with Trump.
Commerce Secretary Howard Lutnick warned other countries in an interview on Bloomberg TV on Thursday against retaliating against the United States.
'If you make him unhappy, he responds unhappy,' Lutnick said.
Lutnick said that some countries, like Britain and Mexico, had thoughtfully examined how they do business with the United States. But for countries that respond with further tariffs, 'the president's going to deal with them with strength and with power,' he threatened.
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