ThroughoutwinecountryinFrance,ItalyandSpain,onereferenceisinconstantthought:200percent.
This occurred due to U.S. President Donald Trump threatening last week to impose such tariffs on European wines, champagne, and various spirits if the EU proceeded with retaliatory duties on certain American goods. Such measures could result in substantial financial burdens for leading wine-producing regions in Europe, impacting particularly those smaller vineyards.
The European wine sector is now at risk amid potential trade conflicts with the United States.
One of those worried is David Levasseur, who comes from a family of vintners spanning three generations and owns a Champagne house in France’s Champagne district.
“It indicates I’m facing significant issues, major troubles,” Levasseur stated while standing in his champagne house, swirling a glass of his estate’s sparkling wine. “When statements are made with such volume,” referring to Trump’s 200 percent tariff threat, “they often revolve around media attention. However, regardless of this, we anticipate some repercussions.”
Similar to other wine sellers and exporters, Levasseur mentioned that imposing a 200% tariff on his exports to the U.S. would effectively bring his operations in that market to a standstill.
"A genuine catastrophe might occur," Levasseur stated.
Among the leading exporters of wine to the United States are Italy, France, and Spain. Following the European Union’s announcement of a 50% tax on American whiskey set to begin on April 1st, Trump threatened Europe's alcoholic beverages sector. This new tariff on U.S. steel and aluminum imports prompted the EU's decision.
In France, a market valued at four billion euros exists.
Gabriel Picard, the leader of the French Federation of Wine and Spirit exporters, stated that imposing 200% tariffs would deal a severe blow to France’s industry. Annually, wine and spirit exports from France to the United States amount to approximately 4 billion euros ($4.3 billion).
"Imposing 200% tariffs has closed off the market entirely," Picard stated.
Nevertheless, he grasped the reasoning behind Europe’s leaders' reaction to Trump's initial tariffs.
"There’s no dispute on this point; we concur that Mr. Trump generates and enjoys strength competitions. We must adjust accordingly,” he stated.
Regarding Italy, their primary concern regarding tariffs involves the wine served at upscale eateries.
In Italy, the wine sector has asked for composure, with hopes that negotiators in both Brussels and Washington will step back from escalating trade tensions.
The United States represents Italy's biggest wine market, where sales have surged threefold in value during the last two decades. According to data from Coldiretti, Italy’s primary agricultural association, exports increased by almost 7%, reaching more than 2 billion euros ($2.2 billion) last year.
In particular, robust sales to upscale eateries make the American market hard to substitute, according to Piero Mastroberardino, who serves as the vice president of Federvini, the national wine producers’ association.
Mastroberardino's "Taurasi Radici" red wine, for example, was rated the fifth-best wine in the world in 2023 by Wine Spectator, an American wine and lifestyle magazine. It sells for around $80 a bottle retail in the U.S., roughly twice how much it costs in Italy, so any tariffs would push it to an "unthinkable price point," he said.
In January, Mastroberardino's American distribution collaborators boosted their orders by roughly 20%, expecting potential Trump-imposed tariffs. However, he noted that this rise in orders wouldn’t be enough to counterbalance the effects of such significant duties over an extended period.
Maintaining a unified stance at the negotiation table is beneficial for all involved," Mastroberardino stated, "particularly for those who are under attack.
Gentle Spanish reds along with sparkling Cava
Spanish wine makers and industry professionals, known for their silky red wines enjoyed annually by countless American visitors to the southwestern part of Europe, voiced comparable worries regarding potential tariffs.
Begoña OlavarrÃa, an economic analyst at the Spanish Wine Interprofessional Organization, stated, 'We find little sense in this idea and sincerely hope it does not become reality.'
Last year, Spain ranked as the fourth-highest exporter of wine to the U.S. based on sales figures and came in at seventh place when measured by volume, stated the trade organization. The exportation of Spanish wines to the United States increased by 7% over the previous year. Additionally, the trade body noted that the wine sector contributes approximately 2% to the nation’s total economic production.
For Spain's producers of Cava, the threat of U.S. tariffs hit especially hard. The U.S. is the number two market for the Spanish bubbly wine, which like Champagne has a designation of origin meaning it can only be made in Spain.
Mireia Pujol-Busquets owns Alta Alella Bodega, which is situated in the Cava region, just south of Barcelona. Established by her family in 1991, she mentioned that both her company and its workforce of 40 people could face a loss of approximately 25,000 bottle sales right away should the United States market close its doors.
"It took us a decade of work to enter the American market, secure distributors, and build our brand," she stated to the AP.
Although the Catalan wine cellar and their American distributors could manage the price rise caused by Trump's 25% tax on wines during his presidency, Pujol-Busques stated that accepting a potential 200% increase would be "entirely unreasonable."
"The circumstances are quite dire," she stated.
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