U.S. stock markets fell in early trading as Donald Trump vowed to impose 200% tariffs on French wine and other alcoholic beverages.
The S&P 500 declined 0.5% to 5,571.94, while the tech-heavy Nasdaq Composite dropped 0.9% to 17,488.32, extending this week’s losses. The Dow Jones Industrial Average slid 0.4% to 41,182.53 as escalating trade tensions fueled concerns over a potential economic downturn.
The Dow is now on track for its worst week since September 2022, with the S&P 500 and Nasdaq Composite set for their weakest performances in six months.
Trump’s tariff threat came in response to the European Union’s decision to impose what he described as a “nasty” levy on U.S. whiskey. He warned that unless Brussels removed the tax immediately, the U.S. would introduce a sweeping 200% tariff on all wines, champagnes, and alcoholic products from France and other EU nations.
Posting on Truth Social, Trump, who is teetotal, accused the EU of being “one of the most hostile and abusive taxing and tariffing authorities in the world,” claiming it was designed to “take advantage of the United States.” He added, “This will be great for the wine and Champagne businesses in the U.S.”
Among those who could benefit from the move is Trump’s son, Eric, who owns Trump Winery in Charlottesville, Virginia.
The EU and Canada have announced retaliatory tariffs on U.S. goods, including bourbon whiskey, in response to Washington’s 25% duties on steel and aluminum, which took effect on Wednesday.
European Commission President Ursula von der Leyen, confirming countermeasures set to begin on April 13, stated, “We deeply regret this measure… tariffs are bad for business and worse for consumers. The European Union must act to protect consumers and businesses. The countermeasures we take today are strong but proportionate.”
U.S. Commerce Secretary Howard Lutnick defended the administration’s stance, telling Bloomberg that the U.S. intends to “teach the rest of the world respect” when it comes to trade.
Meanwhile, U.K. Business Secretary Jonathan Reynolds has not ruled out imposing tariffs on Elon Musk’s Tesla in response to Trump’s global metal tariffs.
