Friday Read: Wine in the crosshairs of geopolitics, again
In the wake of Trump’s latest threat to impose 200% tariffs on French wine, Jens-Peter Barynin, chief economist at VIVI Economics, assesses the ongoing cost of such uncertainty.
On Tuesday, the global wine industry once again found itself rattled by geopolitics. US President Donald Trump threatened to impose 200% tariffs on French wine, a warning that emerged amid broader strains in US-European relations. The comments followed disputes with European leaders and coincided with heightened political tensions related to Trump’s interest in Greenland. When French President Emmanuel Macron rebuked Trump’s proposal for a US-led ‘Board of Peace’, Trump followed with the announcement of punitive trade measures against French wine. On Wednesday, Trump abruptly withdrew the threat, citing progress toward a “framework of a future deal” related to Greenland.
Ultimately, no changes were made to trade policy, but it would be a mistake to conclude that nothing happened. During the dispute, US importers scrambled to assess their exposure, with some rushing to freeze new orders altogether. Others had shipments already en route from France, scheduled to arrive after 1 February, the date many assumed the tariff might take effect. Faced with the prospect of paying a massive tax, some were forced to consider abandoning the cargo at US ports when it arrives. The global wine markets were bracing for impact.
The implications of a 200% tariff would have been far-reaching. The wine trade between the United States and France represents the fourth-largest bilateral supply chain in the global wine industry. According to analysis by VIVI Economics, such a tariff would have added roughly $23.60 to the cost of the average bottle of French wine consumed in the United States. Under these conditions, the trade would likely have collapsed, forcing French wine to be rapidly redirected to other markets.
If this episode were an isolated scare, it might be easy to dismiss. Instead, wine continues to be drawn into disputes rooted in entirely different business interests. During Trump’s first presidency, the United States imposed 25% tariffs on European wine in response to disputes tied to the aeronautics industry. In March 2025, Trump also threatened 200% tariffs on European wine, Champagne, and spirits as part of broader trade negotiations. Perhaps the most enduring example of wine becoming entangled in political conflict is the ongoing boycott of U.S. alcohol by most Canadian provinces as a symbolic stance against Trump’s recurring rhetoric to make Canada part of the United States.
When compared to other commodity sectors, it seems wine industries are especially vulnerable to being drawn into geopolitical disputes. Unfortunately, these tensions persist and very possibly will intensify as Trump advances his vision of a new world order. In this environment, it’s reasonable to expect wine will re-emerge as a target. After all, who would have imagined that Greenland would ever become a significant factor in global wine markets?
The author
Jens-Peter Barynin is the chief economist at VIVI Economics, a premier source for wine analysis and forecasts for the U.S. and global wine industry.
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