Trump threatens Europe with 200% wine tax

Donald Trump raises his voice. On Thursday, the American president threatened to impose a 200% tariff on European wine and other spirits, in retaliation for Brussels' decision to tax American whisky. A trade showdown that threatens to rekindle tensions between Washington and the European Union.

It all started with Wednesday's announcement by the European Commission: from next month, the EU plans to re-impose taxes on 26 billion euros worth of American products, in response to the tariffs imposed by the USA on steel and aluminum. It's a decision that Brussels insists it is taking reluctantly, while leaving the door open for negotiations. "The increase in tariffs benefits no one", the Commission stressed.

But Donald Trump, true to his offensive style, was quick to hit back on Truth Social. In a bellicose diatribe, he accused the EU of being "one of the most hostile and abusive tax and tariff authorities in the world" and of having been "formed solely to take advantage of the United States". In his sights: the EU's 50% tax on American whisky, which he demands be abolished immediately on pain of retaliation.

"If this tax is not removed, we will apply a 200% tariff on all wines, champagnes and other spirits from France and other EU countries", he hammered, before adding, not without provocation: "This will be excellent for the wine and champagne market in the United States." A way of flattering local producers, while at the same time threatening an earthquake for European exporters.

For the European Union has much to lose in this escalation. Last year, wine exports to the United States totalled 4.9 billion euros, or 29% of the sector's non-EU sales. France and Italy, which together account for almost 90% of these sales, would be the first to suffer. After Trump's statement, US index futures fell, and the stocks of major European spirits houses plummeted.

On the Old Continent, Davide Campari, Rémy Cointreau and Pernod Ricard lost more than 3% during the session. Larger players, such as LVMH, gave up 1.5%. Smaller specialist companies were also down: 4% for Champagne maker Lanson-BCC, and -3% for cooper TFF Group.

For the time being, Brussels is playing for time. The European Commission did not immediately react to the US President's threats, but confirmed that the suspension of tariffs on US products would end on April 1, with full implementation of the taxes as of April 13. This decision has not met with unanimous approval in Europe: the spirits and cosmetics industries are openly criticizing Brussels, deeming the new taxes risky for a sector where trade with the United States is crucial.

In addition to spirits, the list of products targeted by European surcharges is long and varied: steel, aluminum, textiles, household appliances, plastics, but also agricultural products such as poultry, beef, eggs, dairy products, sugar and vegetables. All the more reason to tighten the transatlantic iron fist.

It remains to be seen whether this escalation is mere political posturing or the prelude to a new trade war. One thing is certain: with just a few months to go before the American elections, Donald Trump has not finished playing the protectionist card.