“Tit-for-tat trade war could easily get out of hand”
US president Donald Trump has threatened France and other European nations with 200% tariffs on imports of wine, champagne and other alcoholic drinks. The move follows the EU’s own response to the president’s recent tariff on all imports of steel and aluminium, which included a 50% tariff on US spirits.
As reports this morning explain, this ‘tit-for-tat trade war could easily get out of hand’ – and for Portuguese producers, it is something of a nightmare.
The United States is, for example, among the Douro region’s top five export markets in terms of turnover – and the Douro has already been badly affected by a more local crisis affecting the wine market (too much wine is being produced, and cannot ‘sell’).
Nationally, the States are Portugal’s second largest wine export market.
Frederico Falcão, president of national body Viniportugal, admits the tariffs “could be a disaster for Portuguese wines” if they are imposed.
For the moment, they are simply ‘a threat’, hanging in the air thanks to an angry post on Donald Trump’s Truth Social network referring to the EU’s spirits tariff: “If this Tariff is not removed immediately, 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 will be great for the Wine and Champagne businesses in the U.S.”
But the moment is delicate. As CNN Portugal admits: “America’s response to Europe’s response to America’s tariffs in the span of 36 hours shows how trade wars can quickly spiral out of control. After Trump’s 25% tariffs on aluminum and steel went into effect at midnight Wednesday morning, the EU immediately retaliated against what it called an “unjustified” trade action from the Trump administration.
The EU’s countermeasures included tariffs on €26 billion ($28 billion) worth of American goods, including tariffs on boats, bourbon and motorbikes. The measures, which are set to go into effect in April, are “swift and proportionate,” the EU said in a statement.
Stocks fell even deeper into the red Thursday on the trade war escalation. The S&P 500 fell into correction territory, down 10% from its all-time high that it hit just three weeks ago”.
