(WASHINGTON) — President Donald Trump on Thursday threatened a 200% tariff on champagne and other alcohol products from the European Union, escalating a global trade war that has roiled markets and stoked recession fears.
The move came a day after the EU announced plans to slap tariffs on $28 billion worth of U.S. goods, including a 50% tariff on whiskey. Those tariffs marked a response to U.S. duties on steel and aluminum imports.
Trump called on the EU to drop its tariff on whiskey, saying the U.S would otherwise “shortly place” a tariff on alcohol products from the EU.
Trump sharply criticized the EU, describing the organization as “one of the most hostile and abusive taxing and tariffing authorities in the World.”
In a statement a day earlier, Ursula von der Leyen, president of the European Commission, said that the EU “must act to protect consumers and business.”
Stock futures turned lower early Thursday morning, erasing some gains in the S&P 500 and tech-heavy Nasdaq a day earlier. The Dow Jones Industrial Average futures showed a continuation of losses incurred on Wednesday.
Markets have plunged since Trump last week announced 25% tariffs on imports from Mexico and Canada, some of which he soon delayed.
The tariff threats on Thursday mark the latest skirmish in a global trade war. In response to U.S. duties on steel and aluminum, Canada announced retaliatory tariffs applied to $20.7 billion in U.S. goods, government officials said. The U.S. imports more steel and aluminum from Canada than from any other country.
The Trump administration last week slapped a 10% tariff on China, doubling taxes on Chinese imports to 20%. In response, China imposed retaliatory duties on U.S. agricultural goods, deepening a trade war between the world’s two largest economies.
The trade tensions triggered recession fears on Wall Street. Goldman Sachs last week hiked its odds of a recession from 15% to 20%. Moody’s Analytics raised its gauge of the probability of a recession to 35%.
This is a developing story. Please check back for updates.
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