EU wine producers have been assessing the potential impact of a 30% tariff on wine bound for the US market following the latest missive from The White House on Friday (11 July).
The threat, delivered in letter form by President Trump to the European Commission’s President, Ursula von der Leyen, would raise tariffs on imports of EU goods to the US to 30% on 1 August, pending the outcome of negotiations between the two trading territories.
Exports of wine and spirits to the US would be hit, and at a time when many producers are feeling the squeeze because of tough trading conditions more generally.
Representing one of the EU’s biggest wine exporting countries to the US, Lamberto Frescobaldi (pictured), president of Unione Italiana Vini, responded that: “A 30% tariff on wine, if confirmed, would amount to a near-embargo on 80% of Italian wine exports.”
He went on to say that “the fate of our industry – and hundreds of thousands of jobs” hangs in the balance, unless the EU can negotiate a resolution that brings down the proposed 30% tariffs.
“It's unrealistic to think such volumes [of wine] can be redirected elsewhere in the short term,” added Frescobaldi. “At the same time, an extraordinary intervention from the EU will be absolutely necessary.”
Trump’s various threats and U-turns over tariffs on goods imported to the US from around the world are already having serious ramifications in the wine and spirits world, not least in the US itself, where California’s wine producers have lost much of their pre-eminent Canadian export market following a ban by several provinces on the sale of US wines.
However, if the latest tariff hike does go ahead, any drop in foreign wine imports is unlikely to increase US domestic wine sales by enough to offset a fall in US wine exports, while also weakening the hand of the US as a major wine market of influence.
“It took just one letter to write the darkest page in the history of relations between two long-standing Western allies,” said Frescobaldi.
In a response to the letter from The White House, von der Leyen wrote: “We will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required.”