Donald Trump has warned the European Union he will impose a 200% tariff on its alcohol – including wine and champagne – if the bloc imposes duties on US whiskey.

The US president used a social media post to issue his latest threat to the EU, having previously warned that it was created to “screw the United States” and would “very soon” face his escalating trade war.

He wrote in a Truth Social post: “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 whisky.

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“If this tariff is not removed immediately, the US 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 US,” he concluded.

It was Mr Trump‘s response to a European Commission pledge to reimpose previously suspended tariffs on the US in response to US steel and aluminium duties which came into force on Wednesday.

The commission said its retaliatory measures would target US goods worth €26bn from 1 April unless talks could resolve the trade war escalation.

Mr Trump is widely expected, from 2 April, to carry out a previous threat that would see all EU exports to the United States come under tariffs – mirroring current plans to target his closest neighbours Mexico and Canada.

Financial markets were quick to react to the latest escalation, with EU stock markets sinking across the board.

The declines were led by drinks manufacturers. Pernod Ricard on the CAC in Paris, for example, was more than 3.5% lower in the moments after Mr Trump’s post was published.

The FTSE 100 was also in negative territory. Diageo, which counts Irish-made favourite Guinness among its stable of brands, was only 0.1% down.

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While the UK has not been threatened directly with tariffs beyond the universal steel and aluminium duties, many of its constituent companies would be hurt by an expanding EU-US trade spat.

United Nations data shows that EU nations export alcoholic drinks worth more than $11bn per year to the United States, with wine accounting for half that sum.

It was understood that before the threat was made, Spain, France and Italy had been among nations urging the EU not to target wine and spirits as part of its response to the metals duties.

The Irish Whiskey Association said of the growing protectionism: “There is no winner in a trade war. The imposition of tariffs will impact on our businesses and our consumers.

“Having our sector implicated in this dispute puts jobs, investments and businesses at risk and has the potential to be devastating for Irish Whiskey.”

The John Lewis Partnership (JLP) has revealed a 73% rise in annual profits but says staff will receive no bonus for the third year in a row.

The employee-owned business, behind John Lewis department stores and Waitrose supermarkets, said earnings over the 12 months to January came in at £97m – up from the £56m achieved in the previous year.

Group sales rose 3% to £12.8bn, driven by Waitrose, in a year when the department store chain restored its ‘Never Knowingly Undersold’ price promise that was scrapped in 2022.

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New chair Jason Tarry signalled a further £600m investment in its operations on the back of the improved profit performance and a focus on regular pay for staff, known as partners, over a one-off reward.

A 7.4% wage rise was revealed earlier this month as the business moved to bolster retention amid the barren spell for annual bonuses that has only seen one paid out over the last five years.

The last financial year marked only the fourth time since 1953 that JLP had not awarded a bonus.

Mr Tarry, who succeeded Dame Sharon White six months ago amid a post pandemic turnaround plan that included the closure of underperforming stores and thousands of job losses, said “careful consideration” had been given to the bonus.

He told the group’s 73,000 partners: “These are solid results, which show that our customers are responding well to our investments in quality products, value and service.

“We have made good progress with much more still to do.

“Looking forward, I see significant opportunity for growth from both our Waitrose and John Lewis brands.

“Our focus will be on enhancing what makes these brands truly special for our customers.

“This will involve considerable catch-up investment in our stores and supply chain.”

Donald Trump’s trade war has expanded to cover the world, with 25% tariffs on all steel and aluminium imports to the US in effect from today, affecting UK products worth hundreds of millions of pounds.

The duties were announced in mid-February as stock market investors cheered President Trump‘s ‘America first’ agenda which saw only Mexico, Canada and China come under initial pressure.

While two rounds of tariffs on China have been enacted, 25% duties on some Canadian and most Mexican cross-border trade have been withdrawn until 2 April at the earliest.

The tariffs beginning today are designed to protect US manufacturing and bolster jobs by making foreign-made products less attractive.

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They threaten to make the cost of things like cars to soft drink cans – and therefore some drinks – more expensive.

Canada is the biggest exporter of both steel and aluminium to America. However, the White House on Tuesday rowed back on a threat to double the country’s tariff to 50%.

The American tariffs are a threat to UK steel exports worth north of £350m annually – with the bulk of that coming from stainless steel.

The business secretary Jonathan Reynolds said on Wednesday morning that while he was disappointed, there would be no immediate retaliation by the UK government as negotiations continue over a wider trade deal with the US.

“I will continue to engage closely and productively with the US to press the case for UK business interests,” he said.

The EU, however, vowed to retaliate with €26bn of counter tariffs on US goods starting from 1 April,

European Commission president Ursula von der Leyen said she remained open to “meaningful dialogue” with the US.

During Mr Trump’s first term, the bloc countered tariffs with charges on products such as US-made bourbon and jeans which were later suspended.

These duties would be re-imposed from April, the Commission said, with further products added to match the value of the US tariff hit.

Industry body UK Steel said it was a trading partner with the US, not a threat, and urged a government response.

Any fall in demand among US customers will leave producers scrambling for new markets, though some could be directed to domestic projects within the UK.

That steel could prove attractive as China, the world’s largest producer of steel, has threatened to limit its exports in response to the Trump tariffs.

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President Trump is under growing pressure to row back, particularly in his planned battle with nearest neighbours Mexico and Canada.

Markets have turned on the tariff regime, with jitters about the effects of higher import prices souring the US economy first being seen through the currency and bond markets.

The dollar has lost around five cents against both the pound and a resurgent euro alone in the past few weeks.

Stock markets have joined in, with the combined market value of the broad S&P 500’s constituent companies down by more than $4trn on the peak seen just last month.

The big fear is that the protectionism will push the world’s largest economy into recession – a scenario Mr Trump did not deny was possible during a weekend interview.

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US firms, already also grappling the complexities associated with an expanding tariff regime, are also letting it be known that they expect damage to their own businesses.

Delta Airlines lowered its first quarter growth forecast on the back of the turmoil this week while US firms are increasingly facing product boycotts.

Travel bodies have also reported a big drop in the number of Canadians crossing the US border, with road trips down by almost a quarter last month compared to February 2023 according to Statistics Canada.