UK/US trade wars: 'Tariffs are coming'

By Jo Gilbert

Published: 17 February, 2025

Thanks to “Trump 2.0, tariffs are coming. It’s not a matter of if, but when”, WSTA chief executive Miles Beale said at last week’s standout Wine Paris conference, where leading industry figures gathered to discuss how to manage and offset mounting geopolitical tensions and trade wars on the global wine trade.

With Donald Trump’s return to the US presidency impacting around the world, Beale expressed concerns over renewed tariff wars. “Last time, it was disastrous for the wine trade, and we must prepare for a similar situation,” he said, pointing to the UK’s vulnerability to global trade headwinds. “The UK is the largest exporter of spirits in the world and the second-largest importer of wine. That makes us highly exposed,” he noted.

Nicolas Ozanam, MD of the Fédération des Exportateurs de Vins & Spiritueux de France (FEVS), echoed these concerns, particularly regarding French exports. “We’ve already seen a decline in wine exports to China due to Australia’s return to the market. Now, with potential new US tariffs, we risk losing a key market. If both China and the US impose trade barriers, we’ll be in serious trouble,” he warned.

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The conversation then swung onto the Chinese market and whether it represented crisis or opportunity.

Tensions are currently high for Cognac and brandy producers exporting to China – Cognac’s largest export market by value. Exports to the country have declined significantly over the past five years, which has been “very painful for the industry”, Ozanam said. Exporters also face tariffs due to an ongoing probe into alleged dumping practices.

“Cognac and brandy in particular have suffered, and recent retaliatory tariffs linked to the EU’s investigation into Chinese electric vehicles have only worsened the situation. We need a political solution between France and China, or our exports will continue to shrink,” Ozanam added.

However, Don St. Pierre, co-founder of ASC Fine Wines, one of the most influential wine importers and distributors in China, took an unexpectedly optimistic stance.

He said: “I believe the trade war Trump is initiating could create opportunities. Domestic demand in China needs to recover, and that’s good news for exporters. The European Union and China may also find common ground for new trade agreements.”

The discussion then switched onto the role of the EU and emerging markets in a rapidly shifting geo-political landscape. With the US turning inward and China unlikely to lead, the EU has an opportunity to assume global leadership in trade policy, panellists noted.

“The EU is the largest single market in the world. Now is the time to champion free trade agreements,” Beale said, adding that Europe needed to “go quite hard” on free trade deals, which are “not going to be coming from China, it’s not going to be coming from Trump – the EU has an opportunity”.

Ozanam, however, expressed scepticism. “The EU has 27 leaders, and reaching consensus is difficult. While the wine and spirits industry is united in promoting free trade, political divisions often slow progress. The Mercosur agreement with South America, for instance, has faced years of delays. If comprehensive deals are impossible, we should push for sectoral agreements instead.”

In terms of alternative markets, India is emerging as a potential game-changer. The country has a middle class of over 400 million people who are interested in imported wines and spirits. “But high tariffs – sometimes reaching 400% – make it nearly impossible to compete,” said Ozanam.

The panel, which included host Rodolphe Lameyse, CEO of Vinexposium which owns and runs Wine Paris, concluded on a pragmatic note.

Lameyse acknowledged the industry’s turbulent landscape, pointing to the impact of “increasing tension and threats from all sides – trade wars, inflation, new regulations”. However, he said, “if the market was really down, [Wine Paris] would not happen… as industry professionals, we must adapt, protect the market, and find new opportunities.”

On the UK’s approach to trade negotiations, Beale concluded: “We may have our sovereignty back in a way that allows us to make moves and decisions quickly. But we’re a bit between Scylla and Charybdis… [So] The UK needs to move fast. We have to be opportunistic in trade negotiations. If we do nothing, we risk losing our position as a leading wine importer and spirits exporter.”

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