Trump’s US wine tariffs ‘threaten 100,000 jobs in French countryside’

Trump's US wine tariffs 'threaten 100,000 jobs in French countryside'
France is famous for its winemaking traditions. Photo: AFP
French wine producers say the dramatic fall in exports to the US following the introduction of steep tariffs threaten up to 100,000 jobs in France.

Exports of French wine to the United States have fallen by 30 percent since the US slapped a 25 percent tariff on French wine in a row over EU subsidies to Airbus.

The financial losses could have a devastating impact on France's signature sector, French winemakers warned this week. 

“We’re risking at least 100,000 jobs, directly and indirectly,” Jean-Marie Barillère, President of the National Interprofessional Committee of Wine (CNIV), told French press at the Salon d’agriculture, the annual farm show in Paris.

The US is the leading non EU export market for French winemakers in terms of value. Americans bought €1.6 billion worth of French wines and spirits in 2018.

Together with the UK and China, the US accounts for 50 percent of France’s overall wine and spirit sales.  

The French wine sector is the world's top wine exporter in terms of value and third in volume. Photo: AFP

Thomas Montagne, President of the European Confederation of Independent Winegrowers (CEVI), told The Local that 100,000 jobs lost might be “a bit exaggerated,” but that the financial losses resulting from the tax “were dire.”

“It's too early to know how exactly how many jobs will be lost, but there will be losses,” Montagne said.

Montagne himself is a winemaker from the region Luberon, close to Marseille.

The French government said the value of wine exports to the US fell by 44 percent from October to November last year, the month the taxes started to bite – a total financial loss of roughly €65 million in one month.

The plunge was sizable notable because buyers, knowing the tariffs would soon enter into effect, stocked up in the months before, Montagne explained.

“That is also why many winemakers earned more last year than usual,” he said.

Like all French presidents, Emmanuel Macron knows how to appreciate a good bottle of wine. He he is seen wine tasting at the country's annual agriculture fair. Photo: AFP

US President Donald Trump's administration imposed the taxes after the World Trade Organisation faulted the EU for failing to remove illegal subsidies for the pan-European aerospace group Airbus, whose main rival is the US giant Boeing.

“We know that Airbus is important, but we won't accept becoming collateral damage in a war that doesn't concern us,” said Brice Eymard, Managing Director of the Winegrowers Inter-professional Council of Provence Wines (CIVP).

Montagne, who regards himself as a “firmly convinced European,” said that the retaliatory taxes made the whole wine producing sector in France “very angry.”

“We feel like we are being targeted because we are the government's weak spot, but politically we're not listened to,”  he said. 

French President Emmanuel Macron promised winemakers at the farm show that he would ask the EU to set up an emergency compensation fund of €300 million, which the winemakers have requested, sometime “between now and spring.

Eymard said the fund would be “important to ensure the competitiveness” of the French wine sector.

Red wine producing regions like Bordeaux were among the hardest hit by the US tariffs. Photo: AFP

Producers of cheaper wines were among those hardest hit by the taxes (a 25 percent price hike can turn an affordable bottle into a once-in-a-while luxury), but winemakers have also warned that the tariffs would delay environmental transitions inside the sector, a process demanding large investments.”

“The government has asked us to undergo pretty ambitious changes,” Eymard said.

“If producers can't afford it, they won't make them.”

Eymard said that while exports to the US had plunged since October, the sales in January seemed to have been a bit better than expected because importers had feared that the Trump administration would further increase tariffs in February.

In the end, the administration maintained levels from October, but Trump has threatened to hike wine tariffs even further unless there is a deal on taxing digital companies, which European nations want to impose on American giants like Amazon and Facebook.

READ MORE: US rows back on tariff threat on French wine and cheese… for now

Along with French wines, the existing tariffs target $7.5 billion worth of Spanish olive oil, Irish and Scottish whiskies, German industrial tools, British cashmere and a wide range of European cheeses.

One wine producing European country that had not been hit, however, was Italy – a main competitor for French wine exporters.

“It seems like the US wanted to create a division inside the EU,” Eymard said.

Regions like Eymard's own, Provence, which mostly produced rosé wine had been less affected by the tariffs than regions where red wine dominated.

“I'm more worried about those who work in Bordeaux,” Eymard said.

“The global marked for rosé wine marked is growing, and although the US represents about half of our market, we know that there are other countries to tap into.”

“We believe to have enough savings to absorb the choc from this year.”

“But who knows what the situation will look like in six months.”

 

“It seems like the US wanted to create a division inside the EU,” Eymard said.


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