US President Donald Trump has threatened to impose a 200% tariff on alcohol imported from the European Union (EU) amid escalating trade tensions.

The threat comes as the EU plans to impose a levy on US-produced whiskey in retaliation for US tariffs on steel and aluminum imports. Trump called the EU “nasty,” “hostile,” and “abusive,” accusing the bloc of being formed solely to take advantage of the United States.

A spokesperson for the European Commission stated that “calls are being prepared” between the US and the EU to address the situation. It was also confirmed that EU Trade Commissioner Maroš Šefčovič had contacted his US counterparts following Trump’s threat.

On social media, Trump stated that the proposed tariff on alcohol imports would be “great for the wine and champagne businesses in the US.”

This latest tariff threat is part of an ongoing trade war that has shaken financial markets, with concerns over the impact on global economies and consumers, including in the US.

Earlier this month, Trump introduced a 25% tariff on goods from Mexico and Canada, some of which were later suspended, and raised taxes on Chinese imports to at least 20%. His steel and aluminum tariffs, which took effect on Wednesday, imposed a 25% duty on imports, ending previous exemptions, including those for the EU and Canada.

Trump has also suggested the introduction of more tariffs, promising country-specific “reciprocal” tariffs next month, and considering new taxes on items like copper, lumber, and cars.

Leaders in Canada and Europe, key trade partners of the US, have criticized the new taxes as unjustified and responded with their own tariffs on US products.

Trump warned on Wednesday that he planned to retaliate against the EU’s tariffs.

Why is Trump Using Tariffs?
Trump’s administration has used tariffs as a tool to pressure foreign countries, aiming to protect US industries and jobs. In particular, he has focused on sectors like steel and aluminum, calling them vital for national security.

Impact of Tariffs on Americans
While the trade war could lead to higher prices for goods like whiskey, there is also concern over the long-term effects on the economy. In interviews on Thursday, White House officials blamed the EU for escalating the conflict, with Commerce Secretary Howard Lutnick commenting that the EU’s focus on products like Kentucky bourbon and Harley-Davidson motorcycles was “disrespectful.”

Treasury Secretary Scott Bessent downplayed the potential economic impact, suggesting that a trade dispute over a few items wouldn’t significantly affect the market.

A Repeat of Past Trade Battles
The current dispute over alcohol tariffs mirrors past conflicts during Trump’s first term, when the US imposed tariffs on steel and aluminum, and the EU retaliated with a 25% tariff on American whiskey.

US whiskey exports to the EU dropped by 20%, from $552 million in 2018 to $440 million in 2021, according to the Distilled Spirits Council of the US.

The US and EU eventually reached a deal to lift some of the tariffs, but Trump ended the exemptions on Wednesday, showing little interest in negotiating a similar resolution this time.