U.S. retailers brace for tariffs on French wines

Retailers and consumers in the United States are preparing for the possibility of a hefty tariff on French imports after President Trump threatened to retaliate against a new French tax that would hit U.S. Big Tech.

Andrea Shalal had the news for Reuters:

Lovers of Champagne and other French sparkling wines should brace for big cost increases if the United States makes good on a threat to impose 100% tariffs on French goods in a dispute over the country’s planned digital services tax.

A $70 bottle of Moet & Chandon Grand Vintage could surge to $130, for example, said David Parker, chief executive of Benchmark Wine Group, the largest U.S. supplier of fine and rare wines for wine retailers.

The U.S. government said in December it may slap duties of up to 100% on $2.4 billion in imports from France of Champagne, handbags, cheese and other products over the tax, which it concluded would harm U.S. tech companies.

The Trump administration had already imposed 25% tariffs on many non-sparkling European wines in October in a dispute with the European Union over aircraft subsidies. It is separately reviewing whether to increase those duties and expand the list of products affected.

Ahlaam Delange from the Chicago Sun Times reported:

Worried about threatened tariffs on European wines, Craig Perman has stopped buying them for his West Loop shop.

He doesn’t know what those potential tariffs could mean for his sales this year. He does know his European offerings can’t just be replaced with wines from other countries if the Trump administration follows through on plans to impose 100% tariffs on all wines imported from the European Union.

“Over 75 percent of the products I sell come from Europe,” said Perman, owner of Perman Wine Selections, 1167 N. Howe St. He’s been in the wine business for 23 years.

“I have been to a lot of the places [in Europe] of the producers that I sell, and it is not easy for me to simply pivot” to wines produced elsewhere.

He has spent years, he said, educating his customers on what he sells — “years of work, time, travel and tasting.”

Perman has stopped buying European wines for now because, he said, if a tariff that high takes effect, he couldn’t make a profit on those wines.

In an opinion piece for CNN, Jon Bonne wrote:

In coming weeks, the Trump administration will decide whether to make good on its suggestion to levy tariffs up to 100% on many European goods, including Scotch whisky, French handbags, olive oil, a wide range of cheeses — and, especially, wine. The move would retaliate for two unrelated trade fights: a World Trade Organization ruling that Airbus got an unfair boost from EU governments providing it excessive subsidies at Boeing’s expense, and a French tax on digital services, aimed at making corporations such as Google and Facebook pay their fair share for operating overseas.

If you’re asking yourself what Big Tech and big aerospace possibly have to do with Burgundy and provolone, you aren’t alone. The choice of products in this tit-for-tat is so nonsensical as to be funny, if only the economic consequences weren’t so serious.

Why is Trump targeting these goods? No one is sure. These aren’t the first penalties; in October, the Office of the US Trade Representative levied a 25% tariff on many European wines for the same reasons — costs that US businesses have for months been trying to absorb.

Perhaps someone in the administration thought it would boost American equivalents. But if there’s one thing I learned during nearly two decades of writing about wine, it’s that American wine and European wine aren’t interchangeable. Wine’s provenance is often protected by law and by trade agreements; Chablis and Champagne, for example, have to come from those eponymous places. But it’s not only trade law that dictates there’s no equivalency; it’s also personal taste. It’s widely accepted in the industry that people don’t easily switch between one type of wine and another, and experts predict consumers wouldn’t even if the tariffs are imposed on French imports.