Trump threatens 50% tariffs on EU exports
US President Donald Trump has raised the stakes in trade negotiations with the European Union by threatening sweeping 50% tariffs on EU exports from August 1.
The move intensifies fears among European wine producers that they could be excluded from any preferential treatment in a final deal.
They are in negotiations to conclude a trade pact which will see America charge its base rate of 10% on European products, but Trump is putting extreme pressure on Paris, Madrid and Rome, especially by increasing fears that wines may not benefit from preferential treatment in any trade pact.
Annual wine shipments to the US from the EU are worth approximately US$5.9 billion. It is the biggest export market, but the vast volume of the trade comes from comparatively small companies and cooperatives but which combined have a very large (and often militant) rural constituency.
Agricultural lobby holds more clout than luxury giants
Although big companies such as LVMH have large wine interests that might be affected, their cumulative political influence is comparatively small compared with the agricultural lobby.
Partner Content
Over the weekend, fears emerged that Trump plans to manipulate that influence by excluding wines from any deal until he extracts maximum concessions.
Marzia Varvaglione, president of the European wine producers group CEEV, said at the weekend: “We are deeply concerned about the potential exclusion of wine from the list of sensitive goods included in the deal package.”
Tariff details still unclear
Reuters reported last week that the EU was on the brink of securing the application of just baseline tariffs of 10% for aircraft and parts, some medical equipment and alcoholic beverages, but it remains unclear whether wine will be included.
EU representatives have repeatedly called for a “zero for zero” approach to boost the alcohol trade across the Atlantic.
While teetotaller Trump knows that Brussels will match punitive tariffs on European spirits with penalties on US distillers, especially those in Kentucky and Tennessee, he has been lobbied by the US wine sector to underline that American growers are suffering from restricted consumer spending.
Related news
Loss of US fine wine buyers following Trump tariffs akin to the 'exodus' of Asian buyers in 2010
EPR having 'as much impact' economically as Trump tariffs, Concha y Toro warns
Scotch, whiskey and vodka prices set to rise as US Trump tariffs bite
