Another day, another tariff: Trump threatens huge booze tax
US President Donald Trump has escalated his trade war, this time going after the world’s largest consumer market – alcohol.
Trump has threatened 200 per cent tariffs on wine, cognac and other alcohol imports from Europe.
Stocks fell on the news, as investors worried that Trump would enact even stiffer trade barriers around the world’s largest consumer market.
“The Entire World is RIPPING US OFF!!!” Trump also wrote on his Truth Social platform.
US President Donald Trump has gone after the EU in a rant on Truth Social. Image: Truth Social
Trump’s threat came in response to a European Union plan to impose tariffs on American whiskey and other products next month – itself a response to Trump’s 25 per cent tariffs on steel and aluminium imports that took effect on Wednesday.
The European Commission had no immediate comment on Trump’s post.
French Trade Minister Laurent Saint-Martin said in a post on X that his country would not give in to threats and remained determined to respond.
Saint-Martin said Trump was escalating the trade war he chose to unleash.
Foreign ministers of leading Western democracies are meeting in Canada after seven weeks of rising tensions between US allies and Trump over his upending of foreign policy on Ukraine and imposing of tariffs.
Canada, the US’s biggest aluminium provider, has also announced countermeasures of its own to Trump’s metals tariffs.
And 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.
You might like
Many of the EU’s proposed countermeasures, worth €26 billion ($45 billion), would apply to products that have little more than symbolic value, such as dental floss and bathrobes.
But the proposed 50 per cent duty on US bourbon would be a significant hit for the industry. Its exports have grown steadily since the US lifted tariffs Trump imposed during his first 2017-2021 term in office.
The EU accounted for roughly 40 per cent of all spirits exports in 2023, according to the Distilled Spirits Council of the United States, a trade group. Likewise, the US accounts for 31 per cent of EU wine and spirits exports, according to Eurostat.
Trump said his proposed 200 per cent tax on European alcohol would benefit domestic producers, and shares of US drinks manufacturers rose on the news.
Nevertheless, industry officials on both sides of the Atlantic urged their leaders to de-escalate.
“This cycle of tit-for-tat retaliation must end now!” industry trade group spiritsEurope said.
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 US economy and raises the risk of recession.
A Reuters/Ipsos poll released on Wednesday found that 70 per cent of Americans expect Trump’s tariffs to lead to higher prices.
Trump says tariffs are a crucial tool to revitalise US manufacturing industries that have withered due to decades of globalisation, and he has stacked his administration with officials who line up with those views.
Treasury Secretary Scott Bessent said he was not worried about recent Wall Street volatility because the Trump administration is focused on a longer-term transformation of the US economy.
He warned that the EU has more to lose in a trade war, as it relies more on exports to the US.
“In the event that there’s a back and forth with tariffs, I would counsel these government leaders that they are on the losing side of this argument economically,” he said on CNBC.
Australian beef producers vow fight
Australian beef producers have vowed to fight potential US tariffs on agricultural products.
Stay informed, daily
Tariffs of 25 per cent on steel and aluminium were imposed this week after Australia’s failed to secure an exemption from the US.
Trump has also pledged to protect American agriculture, flagging further tariffs on imports.
Cattle Australia chief executive Chris Parker said market access was a fundamental issue.
“Any new initiative that is a barrier to international trade is something that we will vigorously oppose on behalf of Australia’s beef producers,” he said.
“Cattle Australia is extremely concerned by the protectionist comments from the US president regarding potential implementation of tariffs on agricultural products.”
Parker said there was still limited information from the US government, making it impossible to estimate the potential impact on Australian industry.
“Australia has worked hard to gain market access and negotiate trade agreements around the world, which provides the beef export sector with some resilience – we do not want to see that compromised,” he said.
Australia’s US ambassador Kevin Rudd told ABC’s 7.30 program on Thursday night the second Trump administration had been more nationalist on foreign policy, more protectionist on trade policy, and more transactional in its negotiations.
“We’ve seen that very much reflected in the way in which the administration has approached these tariff negotiations,” he said.
“These are deep-seated fundamental changes in this different America, which every one of the 36 countries who negotiated tariff exemptions on steel and aluminium last time round back in 2017, have had to contend with this time round.”
Negotiations focused on the long-standing free-trade partnership with the US, which has a trade surplus with Australia.
“Those arguments at this stage at least, have not prevailed,” Rudd said, vowing not to give up on the difficult negotiations.
“We’re up against an administration which has a very deep-seated view that tariffs are the way of the future.”
Meanwhile, the federal government is encouraging shoppers to buy Australian products.
Labor is also considering local quotas for major projects across the nation amid fears cheap steel could be dumped in Australia.
Australia sends about $800 million worth of steel to the US each year, representing 0.2 per cent of all exports to its close security ally.
Prime Minister Anthony Albanese said the government would continue to argue for the removal of tariffs but ruled out reciprocal trade barriers.
G7 meets
The Group of Seven ministers from Britain, Canada, France, Germany, Italy, Japan and the United States, along with the European Union, gathered in the remote Canadian tourist town of La Malbaie for two days of meetings that in the past have broadly been consensual on issues.
Top of the agenda for Washington’s partners will be US Secretary of State Marco Rubio’s talks on Tuesday with Kyiv in Jeddah, Saudi Arabia, where Ukraine said it was ready to support a 30-day ceasefire deal.
Washington has sought to impose red lines on language around Ukraine and opposed a separate declaration on curbing Russia’s so-called shadow fleet, a murky shipping network that eludes sanctions, while demanding more robust language on China.
On Monday, Rubio cautioned that Washington did not want language that could harm efforts to bring Russia and Ukraine to the table.
On Wednesday, he said a good G7 statement would recognise the US had moved the process to end the war forward.
