Trump threatens 200 percent wine tariff if EU does not remove whiskey tariff

US President Donald Trump on Thursday threatened to slap a 200 percent tariff on all wines and other alcoholic products coming out of Europe if the European Union does not scrap its planned tax on American whiskey.

Ramping up a global trade war in response to blanket US tariffs on steel and aluminum, the European Commission said on Wednesday that it will impose counter tariffs on 26 billion euros (HK$218.4 billion) worth of US goods from next month.

The EU executive said, however, that it remained open to negotiations and considered higher tariffs in no one's interest.

Trump raised the ante in a social media post on Thursday.

"The European Union, 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, has just put a nasty 50 percent Tariff on Whisky," Trump wrote on Truth Social.

If the tariff is not removed immediately, Trump said, the United States would soon place a 200 percent tax on all wines, champagnes and other alcoholic products coming out of France and other EU countries.

"This will be great for the Wine and Champagne businesses in the US," he wrote.

EU wine exports to the United States were worth 4.9 billion euros last year, according to EU statistics agency Eurostat. That was 29 percent of EU's overall exports of wine. Of the EU exports to the United States, France made up almost half and Italy almost 40 percent.

US stock futures moved lower and shares of European spirits makers dropped.

Trump's hyper-focus on tariffs has rattled investor, consumer and business confidence and raised recession fears. He also has frayed relations with Canada, a close ally and major trading partner, by repeatedly threatening to annex the neighboring country.

The European Commission said it will end its current suspension of tariffs on US products on April 1 and that its tariffs will be fully in place by April 13.

REUTERS