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Donald Trump has threatened a 200 per cent retaliatory tariff on alcohol imports from the EU if the bloc imposes an obligation on US whiskey, within the newest salvo in his escalating commerce conflict.
Posting on his Reality Social platform on Thursday, the US president mentioned the transfer was a response to the EU’s resolution to impose a “nasty” 50 per cent tariff on whiskey.
“If this Tariff just isn’t eliminated instantly, 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. This might be nice for the Wine and Champagne companies within the US,” Trump wrote.
The EU mentioned on Wednesday it could hit whiskey with tariffs of as much as 50 per cent from April 1 in retaliation for Washington’s resolution to impose levies on metal and aluminium imports.
Tariffs on EU alcohol exports to the US could be a significant blow to a high-profile European business and knock a number of the area’s largest firms, together with France’s LVMH, the maker of Dom Pérignon and Moët & Chandon champagne.
Shares of drinks firms sank following Trump’s submit, with Pernod Ricard down 2.9 per cent and LVMH falling 1.7 per cent.
Since his inauguration in January, Trump has imposed a sequence of escalating tariffs on the US’s largest buying and selling companions. The chaotic rollout of those levies, which has been marked by a number of sudden U-turns, has rattled companies and monetary markets.
The newest trade of threats between Trump and the EU echoes a dispute throughout his first time period, when Brussels imposed 25 per cent tariffs on American whiskey in retaliation for US levies on metals.
In keeping with the Distilled Spirits Council of america, EU alcohol exports to the US tumbled 20 per cent to $440mn between 2018 and 2021, when the tariffs have been lifted. The worth of alcohol exports to the US rebounded to $699mn final 12 months.
Business executives in Europe and the US reacted with dismay to the prospect of being caught within the crosshairs of one other commerce dispute.
“But once more, spirit drinks have change into collateral harm in an unrelated commerce dispute,” mentioned Pauline Bastidon, commerce and financial affairs director at commerce group spiritsEurope, including that the business was already battling slowing gross sales within the US and China.
US-based Brown-Forman, whose manufacturers embody Jack Daniel’s and Previous Forester, in addition to Japanese group Beam Suntory, the maker of Jim Beam and Maker’s Mark Kentucky bourbon, could be among the many hardest hit within the occasion the EU presses forward with its tariffs.
Brown-Forman might see a ten per cent hit to group working earnings from the levy, in keeping with estimates by analysts at Bernstein.
Advisable
Chris Swonger, president of the Distilled Spirits Council, mentioned: “We urge President Trump to safe a spirits settlement with the EU to get us again to zero-for-zero tariffs.”
Alongside tariffs on whiskey, Brussels mentioned it could apply duties of as much as 50 per cent on €28bn of US items, together with denims and Harley-Davidson motorbikes.
EU officers mentioned that they had intentionally focused merchandise made in Republican states in a bid to spice up opposition amongst lawmakers to Trump’s tariffs.
The European Fee declined to remark.
