Trump's Tariff Tornado

Via Associated Press:

President Donald Trump on Thursday threatened a 200% tariff on European wine, Champagne and spirits if the European Union goes forward with a planned tariff on American whiskey.

The European tariff, which was unveiled in response to steel and aluminum tariffs by the U.S. administration, is expected to go into effect on April 1, just ahead of separate reciprocal tariffs that Trump plans to place on the EU.

But Trump, in a morning social media post, vowed a new escalation in his trade war if the EU goes forward with the planned 50% tariff on American whiskey.

“If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES,” Trump wrote. “This will be great for the Wine and Champagne businesses in the U.S.”

The U.S. president has defined his opening weeks in the White House with near daily drama regarding tariffs, saying that taxing imports might cause some economic pain but would eventually lead to more domestic manufacturing and greater respect for America.

As of now, Europe seems unwilling to back down.

“Trump is escalating the trade war he has chosen,” Laurent Saint-Martin, the French delegate minister for foreign trade, said on X. “France, together with the European Commission and our partners, is determined to fight back. We will not give in to threats and will always protect our industries.”

Trump’s latest tariff threats suggested that even companies that have publicly stood by him could be collateral damage, raising questions about whether the wider business community would be willing to openly challenge a series of trade wars that have hurt the stock market and scared consumers who worry about inflation worsening.

Bernard Arnault, the CEO of French luxury goods company LVMH, attended Trump’s inauguration in January. His company’s wine and spirits brands, which include Moët & Chandon, Krug, Veuve Clicquot and Hennessy, could be subject to the retaliatory tariffs the U.S. president is seeking. The Italian company Campari could also be hurt, after the White House highlighted it at Tuesday’s press briefing for possibly opening a U.S. factory.

The Republican president on Wednesday had signaled that he intended to take the tariffs action.

“Of course I will respond,” Trump told reporters during an Oval Office exchange with reporters.

Trump, in announcing the new steel and aluminum tariffs on Wednesday, openly challenged U.S. allies and vowed to take back wealth “stolen” by other countries, and he drew quick retaliation.

He has separate tariffs on Canada, Mexico and China, with plans to also tax imports from the European Union, Brazil and South Korea by charging “reciprocal” rates starting on April 2.

The EU announced its own countermeasures. European Commission President Ursula von der Leyen said that as the United States was “applying tariffs worth 28 billion dollars, we are responding with countermeasures worth 26 billion euros,” or about $28 billion.

For those who partake, best to stock up on booze and liquor now (but not too much; this could all just be a bluff)