U.S. President Donald Trump has recently threatened to impose a 200% tariff on European wines, Champagne, and spirits, signaling a potential blow to the wine industry in Europe.
AP News reports that this development comes after the European Union announced a retaliatory 50% tariff on American whiskey, set to take effect on April 1. The trade spat between the U.S. and the EU is escalating, with Europe’s wine industry now facing significant challenges.
The Impact on France’s Wine Industry
The French wine industry is one of the largest exporters of wine to the United States, with exports valued at around €4 billion annually. Industry leaders are deeply concerned about the potential consequences of a 200% tariff, which they fear could effectively shut down their market in the U.S.
Gabriel Picard, head of the French Federation of Exporters of Wines and Spirits, stated that such high tariffs would deal a “hammer blow” to France’s wine export sector.
He acknowledged that while the French industry supports the EU’s decision to retaliate against U.S. tariffs on steel and aluminum, the magnitude of Trump’s threat could be catastrophic. Picard also remarked that Trump’s tendency to create contests of strength requires Europe to adapt to the situation.
Italy’s High-End Wine Market at Risk
For Italy, the U.S. represents its largest wine market, especially for premium wines served in high-end restaurants. The Italian wine industry has witnessed significant growth over the past two decades, with exports reaching over €2 billion.
However, producers are worried that the proposed tariffs could make their wines too expensive for American consumers.
Piero Mastroberardino, vice president of the national winemakers’ association Federvini, expressed concerns about wines like his flagship Taurasi Radici red wine, which is sold at premium prices in the U.S. A 200% tariff could push prices beyond the point of affordability, drastically reducing sales and harming the industry’s presence in the U.S.
The Taurasi Radici was ranked the 5th-best wine in the world in 2023 by Wine Spectator, and it retails for $80 a bottle in the U.S., which is about twice its price in Italy. Mastroberardino noted that his U.S. import partners increased orders by about 20% in January to prepare for the potential tariffs.
However, he emphasized that such a drastic price hike would render the U.S. market unsustainable in the long term.
Spain’s Growing Exports Face a Serious Setback
Spain, the fourth-largest exporter of wine to the U.S., is equally concerned. Last year, Spanish wine exports to the U.S. grew by 7%, with Cava—a sparkling wine similar to Champagne—being especially popular.
The U.S. is the second-largest market for Cava, and producers are alarmed by the prospect of a 200% tariff.
Mireia Pujol-Busquets, owner of the Alta Alella Bodega in Spain’s Cava-producing region, emphasized the years of effort invested in building a brand in the U.S. market. Her business and its 40 employees are at risk of losing about 25,000 bottles if the tariffs are implemented.
Pujol-Busquets also noted that her business had already absorbed the impact of a 25% tariff during Trump’s first term. However, she called the idea of facing a 200% increase “completely irrational,” describing the situation as “pretty desperate.”
A Tense Trade Dispute
The potential tariffs are part of an ongoing trade dispute between the U.S. and the EU. This conflict began when the Trump administration imposed tariffs on foreign steel and aluminum, prompting the EU to retaliate with duties on products such as American whiskey.
The wine industry, particularly in France, Italy, and Spain, is now caught in the middle of this trade war, with businesses facing potential ruin.
While industry leaders hope that negotiators on both sides can reach a resolution, the uncertainty surrounding the tariffs continues to create anxiety in Europe’s wine sector.
