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Trump will target European wine to protect US whiskey

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Stocks fell on the news

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Steel and aluminum tariffs led to trade barriers for

alcohol

By Doina Chiacu, Philip Blenkinsop and Andy Sullivan

WASHINGTON, March 13 (Reuters) - U.S. President Donald

Trump on Thursday threatened to slap a 200% 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.

Stocks fell on the news, as investors worried that Trump

would enact stiffer trade barriers around the world's largest

consumer market.

"The Entire World is RIPPING US OFF!!!" Trump wrote on his

Truth Social platform.

Trump's threat came in response to a European Union plan to

impose tariffs on American whiskey and other products next month

-- which itself is a response to Trump's 25% tariffs on steel

and aluminum imports that took effect on Wednesday. The European

Commission had no immediate comment on Trump's post.

Canada, a neighbor and close ally that is the U.S.' biggest

aluminum provider, has also announced countermeasures of its own

to Trump's metals tariffs.

Alcohol is shaping up to be a key friction point in the

trade war Trump has launched since returning to the White House

in January.

Some Canadian retailers have pulled American 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) in all, would apply to products that have

little more than symbolic value, such as dental floss and

bathrobes.

But the proposed 50% duty on U.S. bourbon would be a

significant hit for the industry, which has seen exports grow

steadily since the United States lifted tariffs Trump imposed

during his first 2017-2021 term in office.

The EU accounted for roughly 40% 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 one-third 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.

Trump's proposed 200% tax on European alcohol poses a

pointed threat to luxury goods giant LVMH,, whose

brands include Moët & Chandon champagne and Hennessy cognac.

Founder Bernard Arnault has known Trump for decades and had a

prominent seat at his inauguration in January. The company did

not immediately respond to a request for comment.

Trump said it would benefit U.S. producers, echoing his

argument that his metals tariffs will revive U.S. production.

But his barrage of threats has spooked investors, businesses

and consumers. Producers of jets, coffee, clothing, autos and

packaged foods are among the many businesses scrambling to

assess their operations as Trump's actions threaten

international supply chains.

Some economists say the uncertainty threatens the health of

the U.S. economy and raises the risk of recession. A

Reuters/Ipsos poll released on Wednesday found that 70% of

Americans expect Trump's tariffs to lead to higher prices.

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