US President Donald Trump threatened to levy a 200% tax on European whiskey and wine due to the EU's levies on US technology firms. The action was among the ongoing trade differences between the US and the EU.
The tariffs were suggested as a retaliatory response to the EU's digital services tax, which the US had considered discriminatory towards American technology giants. The EU had levied taxes on entities such as Google, Amazon, and Facebook, claiming that they should pay their fair share towards the EU's tax pool.
Trump's government had been vocal in its criticism of the EU's digital services tax, arguing it was unfairly directed at US firms. The threat of tariffs on European whiskey and wine was interpreted as a means of pressuring the EU to rethink its tax regime.
The tariffs would have had major ramifications for the EU wine and whiskey sectors, which export heavily to the US market. European wines especially would have been greatly affected, as one of their biggest markets is the US.
The US-EU trade dispute accentuates the intricacies of international trade agreements and the difficulty of balancing conflicting interests. The threatened tariffs on European whiskey and wine remind us of the risks involved in trade disputes and the use of diplomatic methods to end such disputes.