TMTPOST -- U.S. President Donald Trump is threatening he would escalate the transatlantic trade war with new hefty tariffs on spirits imported from the European Union.

Credit：Xinhua News Agency

If the European Union does not remove its 50% tariff on Whisky it just put immediately, the U.S. will shortly place a 200% tariffs on all wines, champagnes and alcoholic products coming out of France and other EU member countries, Trump said in a post on his social media Truth Social on Thursday. Trump claimed the 200% tariffs will be great for the wine and champagne businesses in the U.S. He labeled the EU “one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States.” 

Trump is escalating the trade war he has chosen to start and France will “fight back”, French Trade Minister Laurent Saint-Martin said. “We will not give in to threats and will always protect our industries,” the minister posted on X following Trump’s threat. France is the top wine exporter to U.S. with $2.5 worth of exports last year, data from the U.S. Department of Commerce showed.

Stocks of the European spirit makers slumped on Trump’s latest threat. Paris-listed Pernod Ricard and Campari closed around 4.7% and 4%, respectively, leading the food and beverages sector finished 0.2% lower on Thursday. Shares of Moët Hennessy parent LVMH, the world’s largest luxury brand group, shed 1.1%.

The new EU duties on whisky that Trump mentioned, which are set to come into force on April 1, are part of countermeasures the bloc announced on Wednesday, when the 25% U.S. tariffs on steel and aluminum entered effect. The Trump administration also ended exemptions that U.S. had previously granted for shipments from some countries. 

The European Commission said it felt regretful about the U.S. decision to impose “unjustified” tariffs on EU steels and aluminium imports, deeming them disruptive to transatlantic trade and harmful to businesses and consumers, often resulting in higher prices. The EU’s countermeasures could apply to U.S. goods exports worth up to €26 billion, matching the economic scope of the US tariffs, the executive body of the EU said.

The Commission said the EU’s response will be introduced in two steps. First, it will allow the suspension of existing 2018 and 2020 countermeasures against the US to lapse on April 1. The step targets  a range of US products that respond to the economic harm done on €8 billion of EU steel and aluminium exports. Second, given the new U.S. tariffs affecting more than €18 billion of EU exports, it will move forward a package of new countermeasures on US exports. They will come into force by mid-April, following consultation of Member States and stakeholders.

The countermeasures will starting with April 1 and fully in place as of April 13, said Ursula von der Leyen, President of the European Commission. She noted the EU is ready to engage in meaningful dialogue and she has entrusted Trade Commissioner Maroš Šefčovič to resume his talks to explore better solutions with the U.S.

Trump was “totally annoyed” by the EU’s retaliatory actions, leading to the latest threat, U.S. Commerce Secretary Howard Lutnick said on Thursday. “Their tariffs are way up here, and our tariffs are down here. How about: Relax. Let us balance it,” Lutnick said Thursday about the EU.

In a briefing on Thursday, Olof Gill, trade spokesperson for the EU Commission, called on the Trump administration to immediately revoke the steel and aluminum tariffs. “We want to negotiate, to avoid tariffs in the future,” he said. “They bring nothing but lose-lose outcomes, and we want to focus on win-win outcomes.” Gill told CNN that calls are being prepared between EU and U.S. trade officials.