China benefits from US-EU trade tensions, says EU’s foreign policy chief Kallas

KANANASKIS, ALBERTA: China is poised to benefit from the ongoing trade tensions between the US and its allies, European Union foreign policy chief Kaja Kallas stated in an interview with Bloomberg Television.

Speaking on the side-lines of a G7 meeting in Canada, Kallas remarked, “China is looking on with amusement at this situation,” adding that the US trade disputes with Europe are working in China’s favour.

Her comments followed US President Donald Trump’s warning to impose a staggering 200 percent tariff on French wines, champagne, and other alcoholic beverages from the EU, marking yet another escalation in a growing transatlantic trade conflict. Trump’s threat came in retaliation to the EU’s proposal to tax American whiskey exports, a counteraction to his own tariffs on steel and aluminum.

Kallas stressed on the European Union’s preparedness to retaliate while advocating for caution, noting that trade wars frequently lead to inflation spikes detrimental to consumers. “We remain calm and are prepared to defend our interests when necessary,” she stated.

As investors reacted to Trump’s latest tariff threats amid another stable inflation report, US stocks resumed their recent decline on Thursday, driving the S&P 500 into correction territory—the lowest it had been in six months.

Trump threatens further tariffs as EU, Canada retaliate for those already in place

Shares in European alcoholic beverage producers fell, with LVMH, which owns the champagne brands Moët & Chandon and Veuve Clicquot, declining by as much as 2.2 percent. Meanwhile, Remy Cointreau SA, known for cognac production, saw a drop of 4.5 percent, and spirits manufacturer Pernod Ricard fell by 3.6 percent.

In addition to trade concerns, Kallas, a staunch critic of Russia, reacted to President Vladimir Putin’s proposal to discuss a potential ceasefire in Ukraine with the US. However, she expressed scepticism, warning, “We have experienced ceasefires before, and Russia has never honoured such agreements,” insisting that it is up to Moscow to demonstrate goodwill.

Kallas has been outspoken about her disapproval of Trump’s abrupt foreign policy changes since he took office in January. Following the controversial exchange between Trump and Ukraine’s President Volodyr Zelenskiy, she took to social media, declaring that “the free world needs a new leader” and underscored that “it falls upon us, Europeans, to face this challenge.”

Recently, Kallas faced a setback in her diplomatic efforts with the US when a meeting she had planned with Secretary of State Marco Rubio was abruptly cancelled due to “scheduling issues.”