European Wine in the Tariff Crosshairs

With more US tariffs being threatened, producers and importers are looking a way through the trade war.

article originally featured in wine-searcher Dec 9th 2019

With more US tariffs being threatened, producers and importers are looking a way through the trade war. European winemakers are facing two seemingly apocalyptic challenges simultaneously.

On the one hand, there's the issue of the harvest. Unfavorable climatic conditions severely impacted harvests in Italy, France and Spain especially, but with all countries save Portugal reporting declines year-on-year, according to the Organisation of Vine and Wine's recent report on wine production. Worldwide, production was down 10 percent, with Europe showing declines of 15 percent; Spain reporting a decline of 24 percent.

On the other, there’s the 25 percent tariffs that went into effect in October on $7.5 billion in European goods, including specified wines from France, Germany, Spain and the UK. Together, those countries exported 31.2 million cases of wine to the US in 2018, according to Impact Databank. On December 1, Trump threatened further tariffs against French producers after France introduced a 3 percent tax on digital services that affect large America tech companies. The office of the United States Trade Representatives said that another $2.4bn worth of goods from France – including sparkling wine – could be slapped with a 100-percent tax as payback. Just two days later, though Trump, struck a conciliatory tone during a meeting with France’s President Emmanuel Macron.