Possible US-EU trade war is 'idiotic' - French minister

A possible trade war between the European Union and its ally the United States would be "idiotic", French Finance Minister Eric Lombard has said.

It comes after US President Donald Trump threatened to levy a 200% tariff on wines and other alcoholic products from the EU if the bloc did not drop plans to impose tariffs on US whiskey.

Mr Lombard, speaking to France 2 television channel, said Mr Trump's threat did not come as a surprise and said the European Union would respond in kind.

The EU announced its measures targeting up to €26 billion ($28bn) of US goods like bourbon, dental floss and diamonds in retaliation for Mr Trump's 25% duties on steel and aluminium imports taking effect.

Mr Trump has launched trade wars against competitors and partners alike since taking office, wielding tariffs as a tool to pressure countries on commerce and other policy issues.

"If this Tariff is not removed immediately, the US will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER EU REPRESENTED COUNTRIES," Mr Trump posted on his Truth Social platform yesterday.

Global markets tumbled on the news, with Wall Street down sharply, and criticism of the move was swift from European spirit makers.

French wine and champagne company Taittinger said a 200% tariff could bring the cost of some bottles from about $60 to more than $180.

France's federation of wine and spirit exporters, known by the acronym FEVS, put the blame on the European Commission for placing its members "directly into the crosshairs of the US president."

Read more: Tariff threat 'very concerning' for Irish spirits sector

"We are fed up with being systematically sacrificed for issues unrelated to our own," said the group's director general Nicolas Ozanam.

'Hostile and abusive'

Mr Trump called the EU's planned levy on US whiskey "nasty" and dubbed the bloc "one of the most hostile and abusive taxing and tariffing authorities in the World."

He has also said the EU - which for decades has been at the heart of a US-led Western alliance - was formed to take advantage of the United States.

He told reporters he would not bend on his aggressive tariffs policy, while European Commission President Ursula von der Leyen said the bloc is ready to negotiate over escalating duties, though she insisted that tariffs are "bad for business."

French Foreign Trade Minister Laurent Saint-Martin said his country would "not give in to threats" and was "determined to retaliate,' while Spain's agriculture minister said he hopes to negotiate.

US Commerce Secretary Howard Lutnick told Bloomberg Television he had plans to speak with his European counterparts, while an EU spokesperson said its trade chief has reached out to Washington.

EU economy chief Valdis Dombrovskis meanwhile held an introductory call with US Treasury Secretary Scott Bessent, in which he expressed concern over US tariffs and their negative economic impact on both sides.

US distillers have called the EU's levy on American whiskey "deeply disappointing."

A 2018 imposition of similar tariffs led to a 20% drop in US whiskey exports to the European Union.

Mr Trump's tariff wars have taken aim at Canada, Mexico and China over allegations they are not doing enough to curtail fentanyl smuggling or illegal immigration into the United States - even if in the case of Canada, the border sees negligible smuggling.

He has also taken aim at commodities including steel, aluminium and copper.

Some countries like China and Canada have already imposed retaliatory tariffs, while uncertainty over Mr Trump's trade plans and worries that they could trigger a recession have roiled financial markets.

After talks in Washington yesterday with Mr Lutnick, Canadian science and industry minister Francois-Philippe Champagne said he saw "potential for a reset" in cross-border relations when new prime minister Mark Carney takes office today.

Tariff war causes concern among Irish distillers

Irish distillers have expressed concern over the alcohol tariffs.

Speaking on RTÉ's Morning Ireland, the Founder of The Shed Distillery said he has felt "let down" by the European Commission in targeting bourbon with a 50% tariff.

Among the Leitrim-based company's brands are Drumshanbo gin and whiskey, and Sausage Tree vodka.

Pat Rigney said it was "inevitable" that there would be a response from the US of some kind.

"It’s a steel and aluminium dispute; it has nothing to do with bourbon and our wine and spirits in Europe, so being brought into it by the European Commission is really disappointing," he said, adding that the issue needs to be addressed "immediately."

He said that the level of tariffs being so high would make it too expensive to operate within the market.

"The drinks relationship across the pond is best in class, we have no tariffs, and why should we bring them in now at this point?" he asked.

Mr Rigney described the US market as "critical" to his business, making up around 35% of it.