After weeks of global attention on the US-Iran conflict, President Donald Trump is once again focusing on trade tariffs, raising fresh concerns about inflation, global commerce and economic growth.
With a fragile ceasefire opening a possible path towards ending the prolonged conflict in the Middle East, the Trump administration has resumed its aggressive trade posture, threatening new tariffs on several key trading partners, including France, the European Union, Japan, China and India.
Ahead of the G7 Summit in France, Trump warned that he could impose a 100 percent tariff on French wine and Champagne if French President Emmanuel Macron refuses to withdraw France's 3 percent digital services tax.
The French levy primarily affects major US technology companies such as Amazon, Alphabet, Apple and Meta.
This is not the first such warning. Trump has repeatedly threatened tariffs on French wine since the digital tax was introduced in 2019. Earlier this year, he even floated a 200 percent tariff after disagreements with Macron over Middle East diplomacy.
However, previous threats were never implemented.
The latest warning comes as the White House considers broader trade actions. Trump has also signalled higher tariffs on European automobiles, alleging that the European Union violated a trade understanding reached last year.
Meanwhile, the Office of the US Trade Representative has proposed tariffs starting at 12.5 percent on imports from Japan, China and India, citing concerns over forced labour practices in supply chains.
Many of these measures could come into effect after a temporary 10 percent import duty expires next month.
The renewed tariff rhetoric arrives at a delicate moment for the US economy. Trump's sweeping tariff programme introduced in April last year disrupted business activity, delayed investment decisions and weakened hiring plans across several sectors. Although many of those tariffs were later struck down by the Supreme Court, businesses spent months navigating uncertainty.
Economists fear that a fresh round of tariffs could once again slow investment and disrupt supply chains.
Inflation is already creating challenges for US policymakers. US consumer inflation accelerated to 4.2 percent last month, the highest level in three years, driven largely by rising energy prices following tensions in the Middle East. Monthly inflation rose 0.5 percent, with energy costs accounting for around 60 percent of the increase.
The prospect of additional tariffs could further increase import costs and place upward pressure on prices.
Even if oil flows through the Strait of Hormuz return to normal, economists believe inflation risks may persist.
For investors and businesses, the return of Trump's tariff agenda means trade policy could once again become a major source of market volatility in the months ahead.