Winemakers discovering Trump’s tariffs laborious to swallow | EUROtoday

Burgundy is without doubt one of the most prestigious wine areas in France, and the US is its greatest export market. But now Donald Trump’s tariffs are threatening to cost European wine out of the American market.

Crouched in chilly mud beneath a skinny Spring rain, winery worker Élodie Bonet snaps off undesirable vine shoots together with her fingers and pruning clippers.

“We want the vine to put all its energy into the shoots that have the flowers where the grapes are going to grow,” she explains.

I go away Élodie working her manner down the rows of vines, and stroll as much as the home and vineyard within the Burgundy village of Morey-Saint-Denis, the place I meet proprietor and winemaker Cécile Tremblay.

She takes me right down to her cellar to style a few of her prized pink wines, standing among the many oak barrels and outdated bottles with labels weathered by mould and age.

They have names on them that make wine lovers go weak on the knees – Nuits-Saint-Georges, Echezeaux, Vosne-Romanée, Clos-Vougeot, and Chapelle-Chambertin.

Ms Tremblay sells over half of her wine overseas, beneath the identify Domaine Cecile Tremblay.

“For the United States, it’s around 10% of the production; it’s a big production for me!” she says.

After threatening a 200% mark-up on alcohol from Europe, Donald Trump imposed a 20% tariff on virtually all European Union merchandise on 5 April.

Four days later, he lowered this to 10%, with the menace that he’d hike it again up once more to twenty% in July, relying on how commerce negotiations pan out. And now Trump is threatening a future tariff of fifty% on all items from the EU.

I ask Ms Tremblay if she’s nervous. “Yes, sure,” she says, “As everybody is.”

But that’s all she’s going to say on the matter. French winemakers are strolling on eggshells in the mean time, fearful of claiming something that may worsen the state of affairs.

Perhaps their representatives will probably be extra forthcoming? I get in my automotive and drive over to certainly one of her neighbours – François Labet. He is the president of the Burgundy Wine Board, which represents this area’s 3,500 winemakers.

“The US is the largest export market for the whole region. Definitely,” he tells me. “They are the biggest in volume and the biggest in value.”

And, till Donald Trump’s re-election, the US market was booming. While French wines and spirits world exports fell 4% final 12 months general, gross sales of Burgundy wines to the US rose sharply.

In quantity phrases, there have been up 16% from 2024, to twenty.9 million bottles. This was price €370m ($415m; £312m) in revenues, 26.2% greater than in 2023.

Mr Labet says the US accounted for a couple of quarter of Burgundy’s wine exports final 12 months.

Burgundy’s repute overseas is especially for its pink wines, that are produced from the celebrated pinot noir grape. Indeed, within the English-speaking world, burgundy will not be a lot a wine as a color.

The French phrase for a similar color is bordeaux; displaying they know extra about their wine, as a result of whereas Bordeaux wines are principally pink, two-thirds of Burgundy is definitely white.

These are predominantly produced from the chardonnay grape. Chablis, one of many best-known examples, is extraordinarily well-liked within the US.

Burgundy additionally produces an more and more profitable glowing wine, referred to as Crémant de Bourgogne, and a small quantity of rosé.

All of which is nice for Burgundy as a result of whereas normal pink wine consumption simply retains happening, white is holding agency, and glowing goes up.

Also, the reds that come out of Burgundy are, in accordance with Mr Labet, the type customers more and more need, as they’re usually lighter than New World reds.

“What is interesting to see is that there is a strong de-consumption of what we call the big reds, made in the US. Wines with a lot of alcohol, aged in new wood.”

Less solar and decrease temperatures in Burgundy, even with local weather change, means much less sugar within the grapes and decrease alcohol content material.

Mr Labet remembers when, for 18 months of his first presidency, Donald Trump hit European wine with a 25% import tariff throughout a dispute over airways.

“We were hostages of that situation, and it really did affect our sales to the US. We had a drop of about 50% of our exports to the US.”

Regarding the present 10% Trump tariff, he predicts that French wine producers and US retailers will cut up the price of the brand new import obligation between them with a view to keep gross sales.

But what would be the influence if in July Trump does resolve to extend the tariff on all European Union exports to twenty%, as he has threatened to do? “We will go back to the 2019 situation where the market was almost stopped,” says Mr Labet.

For French wines on the whole, issues could possibly be even worse.

“When President Trump raised import duties by 25% for one-and-a-half years of his first mandate, we lost about $600m [£450m] very quickly,” says Jerome Bauer, president of the French National Wines and Spirits Confederation.

“But back then Champagne wasn’t included, and neither were wines stronger than 14 degrees of alcohol. So you can see the scale of the threat today.”

The resolution Mr Bauer is backing is free commerce. No tariffs. But you’d count on him to say that, on condition that France and Europe run an enormous commerce surplus with the US with regards to wines and spirits.

More shocking, maybe, is the opinion of his American rivals in California and Oregon who, you may suppose, can be cracking open one thing a bit particular to rejoice.

“This looks horrible from our perspective. We don’t like it one bit,” says Rex Stoltz, vice-president of business relations at Napa Valley Vintners, which represents 540 wineries within the sunny slopes of California’s most well-known wine area.

“Wine is an international product. Even here in the Napa Valley, our wineries primarily get their corks from Portugal, and their oak barrels, a key component in winemaking, from France.

Mr Stoltz adds: “They’re already costly and the potential is that they may get costlier.”

Also, trade wars cut both ways. He says the tariffs announced against Canada are having a devastating impact on US wine exports.

“Canada is an important export marketplace for California wines, and one of many high export markets for Napa Valley wines. Right now, there are zero Napa Valley wines on the cabinets of shops in Canada.

“They’ve removed all American alcohol beverage products from their store shelves!”

Mr Stoltz provides: “We just want to compete on an even playing field with our friends and neighbours all over the world. That’s our ask and that’s our hope.”