US stock markets fall as Trump threatens 200% tariff on French wine

By Fatimah Idera

US stock markets fell today on Wall Street as Donald Trump threatened to impose 200% tariffs on French wine, cognac, and alcoholic drinks imported from Europe.

The S&P 500 lost 1.4%, while the tech-heavy Nasdaq Composite closed down 2% after resuming its decline from the heavy losses suffered earlier this week.

The Dow Jones Industrial Average closed down 1.3% as concerns grew that the US tariff war could lead to an economic downturn.

Mike Dickson, head of research at Horizon Investments, said, “There are new tariff headlines every day, and that’s weighing on things as sentiment remains terrible.”

“You’re seeing it most acutely in some of the more sensitive areas of the market, like the fairly inflated Magnificent 7,” Mr. Dickson added, referring to a group of major technology firms, including Microsoft and Amazon. “It doesn’t feel great out there right now.”

The S&P 500 closed 10.1% below its February 19 record high, confirming that America’s leading index has been in an official market correction since then.

The stock market decline came as the US president threatened to impose a 200% tariff on French wine and champagne in retaliation for the EU’s decision to introduce a “nasty” levy on American whiskey.

The US president stated that he would introduce the tariff on all wines, champagnes, and alcoholic beverages from France and the EU unless Brussels removed its levy “immediately.”

Trump’s threat came in response to the European Union’s plan to impose tariffs on American whiskey and other products next month—measures taken in retaliation for Trump’s 25% tariffs on steel and aluminum imports, which took effect on Wednesday. The European Commission had no immediate comment on the move.

Trump has threatened to impose a variety of trade penalties since returning to the White House in January, though he has postponed action on many of them. At an Oval Office meeting with NATO Secretary-General Mark Rutte on Thursday, he reaffirmed his commitment to imposing reciprocal tariffs on all trading partners starting April 2.

The EU and Canada announced retaliatory tariffs on US goods, including bourbon whiskey, as “countermeasures” to Washington’s 25% duties on steel and aluminum, which took effect on Wednesday.

In a post on Truth Social, Mr. Trump, who is teetotal, said: “The European Union, one of the most hostile and abusive taxing and tariffing authorities in the world—which was formed for the sole purpose of taking advantage of the United States—has just put a nasty 50% tariff on whiskey.

“If this tariff is not removed immediately, the US will shortly place a 200% tariff on all wines, champagnes, and alcoholic products coming out of France and other EU-represented countries. This will be great for the wine and champagne businesses in the US.”

Mr. Trump’s son, Eric, is among those who could potentially benefit, as he owns Trump Winery in Charlottesville, Virginia.

The EU and Canada announced retaliatory tariffs on US goods, including bourbon whiskey, in response to Washington’s 25% steel and aluminum duties that took effect on Wednesday.

Announcing the tariffs, which will take effect on April 13, European Commission President Ursula von der Leyen said: “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.”

Shortly after Trump’s post on Truth Social, US Commerce Secretary Howard Lutnick told Bloomberg that the US was going to “teach the rest of the world respect” when it comes to trade.

Jonathan Reynolds, the UK Business Secretary, has refused to rule out imposing tariffs on Elon Musk’s Tesla in response to Mr. Trump’s global metal tariffs.