Trump provokes trade reaction with French wine tariffs jibe

Trump provokes trade reaction with French wine tariffs jibe

A tweet by US president Donald Trump appearing to threaten a wine trade war with France was met with concern among several merchants and a Bordeaux producer at a private dinner being held at the French embassy in Washington DC at the time.

As part of an apparent series of rebukes aimed at French president Emmanuel Macron, president Trump tweeted on 13 November, ‘France makes excellent wine, but so does the US.

‘The problem is that France makes it very hard for the US to sell its wines into France, and charges big Tariffs, whereas the US makes it easy for French wines, and charges very small Tariffs. Not fair, must change!’

Import tariffs are set at European Union level, meaning that Trump would be taking on Brussels in any trade dispute, not just France.

Still, several private wine buyers and merchants dining at the French embassy in Washington DC on 13 November said that any higher tariffs on French wines entering the US would harm wine sales in the country.

‘French wine sales are an enormous part of our business,’ said Phil Bernstein, of Washington-based MacArthur Beverages. ‘Of course any kind of tariff is going to hurt us.’

Marielle Cazaux, of Château La Conseillante, who hosted the dinner for 30 guests featuring 16 of the Pomerol estate’s vintages, said, ‘exporting wine to the US is already complicated, given rigorous customs regulations and the three-tier system for sales.

‘I love the US, and we have many fans of French wine here, but [higher] tariffs would not be good at all.’

How much wine travels between the US and EU?

US wine exports to the EU were valued at $553 million in 2017, down by 19% versus 2016 – largely due to a drop in the value of the pound sterling currency affecting sales to the key UK market.

EU wine exports to the US in 2017 were worth nearly 3.6 billion euros (around $4bn), according to European Commission figures. France accounted for 1.6bn euros of that total.

Are US tariffs on EU wine lower?

In terms of tariff reciprocity, figures from the California-based Wine Institute show that US import tariffs on EU wines are generally lower than for bottles travelling in the opposite direction.

For example, the EU import tariff per 750ml bottle can range from $0.11 to 0.29, depending on the type alcoholic content of the wine, according to Wine Institute figures. By comparison, the US import tariff on a 750 ml bottle is $0.05 for still wine and $0.14 for sparkling wine.

However, there is also debate within the US about the extent to which customs duties and the traditional three-tier distribution system add extra complexity – and so cost.

‘Restrictions on shipments from out-of-state retailers, for example, impact the sale of imported wines, since, in the United States, retailers are the only source of imported wines,’ said NAWR executive director Tom Wark.

Editing by Chris Mercer

Recently published on Decanter Premium:

Top La Conseillante wines: 21 vintages tasted by Jane Anson

Share This