Trump's Trade War Threatens Global Economy with New Tariffs

U.S. President Donald Trump proposed a 200% tariff on European alcohol imports, escalating a trade conflict with Europe. This move responds to EU's tariffs on American whiskey, following Trump's metal tariffs. The trade tension has raised recession fears and could disrupt international supply chains.

In a bold move, U.S. President Donald Trump announced a proposal to impose a 200% tariff on wine, cognac, and other alcohol imports from Europe, further stoking a global trade war. The announcement, which emerged on Thursday, sent financial markets into a frenzy, reflecting investors' jitters over potential economic repercussions and heightened trade barriers.

This development is in retaliation to the European Union's plan to enact tariffs on American whiskey and other products next month. These EU-imposed tariffs are countermeasures to the 25% tariffs on steel and aluminum that Trump put into effect. The escalation has not only affected stocks but has also triggered nations like Canada to initiate their own countermeasures, particularly concerning aluminum imports.

Industry leaders on both sides of the Atlantic have expressed deep concern and urged de-escalation of the trade tensions. As both European and American spirits industries brace for impact, the potential repercussions for broader supply chains and the risk of recession loom large. Despite the current market volatility, U.S. Treasury Secretary Scott Bessent remains optimistic about the strategic transformation underway in the U.S. economy.

(With inputs from agencies.)