French winemakers face anxious wait over US tariffs threat

French winemakers face anxious wait over US tariffs threat
All photos: AFP
French winemakers say they are waiting anxiously to see if Donald Trump will act on his repeated threats to impose extra tariffs on French wine in retaliation for taxes on tech giants.

As the leaders of the world's richest countries gather in Biarritz for the G7 opening Saturday, winegrowers in host nation France are concerned that tariffs will be on the agenda.

Representatives tech giants including Google, Apple, Facebook and Amazon on Monday railed against France's plan to plug the loophole that allows the firms to pay next to nothing in countries where they make huge profits.

US president Trump has repeatedly threatened to impose tariffs on French wine, most recently in response to the GAFA tax, but in 2018 he made the same threat in discussions on the EU's export duties.



But while putting on a brave face, the French wine sector – the world's top exporter in terms of value and third in volume – is making contingency plans.

Will Americans – who bought €1.6 billion worth of French wines and spirits last year – be willing to pay double for their favourite Côte du Rhone?

“We have to take the American president's threats seriously,” said Jerome Despey, the head of the wine industry section of France's leading agricultural union FNSEA. “Wine cannot be held hostage in an international trade negotiation.”

Imported wine currently faces US duties of 5.3 cents to 12.7 US cents (5 to 12 euro centimes) a bottle, while US wines shipped to the EU face duties of 11 to 29 cents a bottle, according to trade bodies.

The contingency plans vary among winegrowing regions. In Champagne, “of course we're worried because the United States is our leading market in terms of value after France,” said regional winegrowers representative Maxime Toubard.

But he said he remains “confident” because “American consumers like champagne.”

In the southwestern Cognac region – which exports nearly half of its production to the United States – one industry figure said business leaders were “vigilant” but “nothing is confirmed.”

Thomas Montagne, president of the European Confederation of Independent Winegrowers (CEVI), noted that cheaper and mid-range wines were most at risk from new US tariffs, as opposed to reserve wines.

The high-end wines that will lose market share in the United States because of tariffs will still find other export markets, Montagne told.

“While (grands crus) aren't consumed in the United States, they will be elsewhere,” he said. “These are wines that can be put away for years and can wait before being sold,” Montagne told France Inter radio.

Mid-range and cheaper wines will “pay the price” imposed by US tariffs, he said.

In Provence, bolstered in recent years by a growing US preference for rosé wines, the concern is deep.

The region's US exports have risen from “practically nil” to 46 percent in a decade, a local industry source said.

Two labels in particular account for the boom: Whispering Angel by Var winegrower Sacha Lichine, and Côtes de Provence Rose Miraval produced by the Provencal estate of Hollywood stars Brad Pitt and Angelina Jolie.

“They hit their target of young consumers by projecting a festive image mixing the natural, free-flowing lifestyle of the South (of France), and the whole industry got behind it,” the source said.

In the United States, rosé has become synonymous with Provence, said Jean-Jacques Breban, president of the region's wine federation (CIVP), which is actively seeking new markets, notably China.

“With the United States and Trump, we're flying blind,” a top French wine official said, adding that existing concerns over Brexit – Britain is France's second wine export market – make the US tariff threat “even harder to take”.

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