CHAMPAGNE, France — Throughout wine nation in France, Italy and Spain one quantity is prime of thoughts: 200%.
That is as a result of final week U.S. President Donald Trump threatened a tariff of that amount on European wine, Champagne and different spirits if the European Union went forward with retaliatory tariffs on some U.S. merchandise. The highest wine producers in Europe might face crippling prices that might hit smaller wineries particularly onerous.
Europe’s wine business is the most recent to search out itself within the crosshairs of a doable commerce spat with the U.S.
Amongst these involved is David Levasseur, a third-generation wine grower and proprietor of a Champagne home in France’s eponymous area.
“It means I’m in hassle, massive hassle. We hope it’s simply, as we are saying, blah blah,” Levasseur stated, standing in his Champagne home as he swilled a flute of his winery’s bubbly. “When somebody speaks so loudly,” he stated of Trump’s 200% risk, “it’s concerning the media buzz. However in any case, we predict there will likely be penalties.”
Like different wine sellers and exporters, Levasseur stated {that a} 200% tariff on what he exports to the U.S. would primarily grind to a halt his enterprise in that nation.
“It might be an actual catastrophe,” Levasseur stated.
Italy, France and Spain are among the many prime 5 exporters of wine to the US. Trump made his risk to Europe’s alcohol business after the European Union introduced a 50% tax on American whiskey anticipated to take impact on April 1. That obligation was unveiled in response to the Trump administration’s tariffs on foreign steel and aluminum.
Gabriel Picard, who heads the French Federation of Exporters of Wines and Spirits, stated 200% tariffs could be “a hammer blow” for France’s business, whose wine and spirits exports to the U.S. are value 4 billion euros ($4.3 billion) yearly.
“With 200% duties, there isn’t any extra market,” Picard stated.
Nonetheless, he understood why European leaders responded to Trump’s preliminary tariffs.
“There isn’t any debate about that. We agree that Mr. Trump creates and likes to create contests of energy. We now have to adapt to that,” he stated.
In Italy, the wine business has referred to as for calm, hoping that negotiators in Brussels and Washington can again down from the rising commerce spat.
The U.S. is Italy’s largest wine market, with gross sales having tripled in worth over the previous 20 years. Final 12 months, exports grew by practically 7% to over 2 billion euros ($2.2 billion) in accordance with Italy’s major farming foyer Coldiretti.
Sturdy gross sales at high-end eating places, specifically, make the U.S. market troublesome to interchange, stated Piero Mastroberardino, vp of the nationwide winemakers’ affiliation Federvini.
Mastroberardino’s “Taurasi Radici” crimson wine, for instance, was rated the fifth-best wine on the planet in 2023 by Wine Spectator, an American wine and way of life journal. It sells for round $80 a bottle retail within the U.S., roughly twice how a lot it prices in Italy, so any tariffs would push it to an “unthinkable worth level,” he stated.
In January, Mastroberardino’s U.S. import companions elevated orders by about 20% in January anticipating doable Trump tariffs. However the improve in orders wouldn’t offset the influence of tariffs, notably that prime, he stated, for lengthy.
“It’s in everybody’s curiosity to keep up a united entrance on the negotiating desk,” Mastroberardino stated, “particularly those that are being focused.”
Wine producers and business specialists in Spain, whose easy reds are savored by tens of thousands and thousands of American vacationers who go to the southern European nation yearly, shared comparable issues about potential tariffs.
“We do not assume they’ve a lot logic and we hope it by no means involves fruition,” stated Begoña Olavarría, an financial analyst on the Interprofessional Wine Group of Spain.
Spain was the fourth-largest exporter of wine to the U.S. final 12 months in gross sales, and the seventh-largest by quantity, in accordance with the commerce group. Spanish wine exports to the U.S. grew by 7% final 12 months. And the wine business represents about 2% of the nation’s general financial output, the commerce group stated.
For Spain’s producers of Cava, the specter of U.S. tariffs hit particularly onerous. The U.S. is the most important marketplace for the Spanish bubbly wine, which like Champagne has a designation of origin that means it may possibly solely be made in Spain.
Mireia Pujol-Busquets is proprietor of the Alta Alella Bodega positioned in Cava nation simply south of Barcelona. Based by her household in 1991, she stated her enterprise and its 40 workers instantly danger dropping gross sales of some 25,000 bottles if the American market slams shut.
“We spent 10 years of effort opening the American market, discovering distributors and constructing a model,” she advised the AP by cellphone.
Whereas the Catalan bodega and its distributors within the U.S. have been in a position to take in the value improve induced by Trump’s 25% tariff on wines throughout his first time period, Pujol-Busquets stated that it’s “utterly irrational” to contemplate consuming a 200% hike.
“The state of affairs is fairly determined,” she stated.
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Naishadham reported from Madrid. Related Press journalists Joseph Wilson in Barcelona, Spain; John Leicester in Paris; and Colleen Barry in Milan contributed to this report.
