OTTAWA - China stands to gain from the ongoing trade wars between the US and its allies, the European Union’s foreign policy chief Kaja Kallas said in an interview with Bloomberg Television.

“Who is laughing on the side or looking at the side is China,” Ms Kallas said on March 13 on the sidelines of a Group of Seven (G-7) meeting in Canada. “It’s really benefiting from the US having a trade war with Europe.”

Her comments came hours after US President Donald Trump threatened to impose a 200 per cent tariff on wine, champagne and other alcoholic beverages from France and elsewhere in the EU, the latest escalation in a growing transatlantic trade war.

Mr Trump made the threat in response to the EU’s plan to tax American whiskey exports, a retaliation against Mr Trump’s steel and aluminium tariffs.

Ms Kallas reiterated the EU’s readiness to retaliate while calling for restraint as trade wars usually trigger inflation peaks that harm consumers.

“We keep a cool head and of course we are ready to act and defend our interest when we need to,” she said.

As investors took stock of Mr Trump’s latest tariff threats amid another benign inflation report, a three-week selloff in US stocks resumed in force on March 13. That pushed the S&P 500 into a correction that left it at the lowest in six months.

Shares in European makers of alcoholic beverages fell earlier, with LVMH, which owns champagne houses Moet & Chandon and Veuve Clicquot, down as much as 2.2 per cent. Cognac producer Remy Cointreau SA dropped 4.5 per cent and spirits maker Pernod Ricard declined 3.6 per cent.

Ms Kallas, a known Russia hawk, also responded to President Vladimir Putin, who earlier on March 13 said he wants to discuss a proposed Ukraine ceasefire with the US, though he warned that any truce should lead to a long-term resolution of the war.

“We have seen the ceasefires before and Russia has never kept those agreements,” said Ms Kallas, while stressing that the ball is in Moscow’s court to show goodwill. 

Ms Kallas has had harsh words for Mr Trump’s abrupt foreign policy shift since taking office in January.

After the public spat between Mr Trump and Ukraine’s Volodymyr Zelensky in the Oval Office, the former Estonian prime minister posted on ...