What about the tariffs?
US Wine Merchants Brace for Impact Amid European Export Surge and Trump Tariff Threats
As Donald Trump takes office, US wine merchants and restaurateurs are navigating uncertainty, advocating for measures to shield small businesses from potential fallout. A rush to stockpile European wine and cheese has emerged, reflecting concerns over looming tariffs.
Surge in EU Wine Exports
European wine exports to the US reached record highs in November 2024, coinciding with Trump’s election victory. Compared to November 2023, imports surged by 18% in volume and 19% in value. Italy, a leading EU wine exporter, experienced a significant boost, with sparkling wine shipments to the US jumping 41% and still wines rising 17%, according to the Italian Wine Union (UIV). This surge reflects a preemptive response to anticipated trade barriers.
French producers also reacted, with cognac exports to the US increasing sharply in December. The data highlights how European producers are racing to meet demand before potential tariffs disrupt the market.
A Mixed Outlook for the Wine Industry
President Trump’s campaign promises have raised questions about future trade policies. While tariffs may benefit US producers and align with environmental goals by reducing the carbon footprint of long-haul wine shipments, they pose challenges for importers and the broader restaurant industry. Critics argue that Trump’s policies could destabilize the wine market, yet some suggest this shift could realign priorities toward local economies and sustainability.
The debate underscores the tension between financial motivations and the principles of natural wine production. For some European winemakers, exporting to markets like the US, Japan, and South Korea represents both economic opportunity and prestige, despite the environmental costs associated with global shipping.
Tariff Expectations and Potential Impact
A proposed 25% tariff on European wine imports is expected to create significant hurdles for small and mid-sized producers, while high-end wines and elite brands may weather the storm more easily. The disparity in impact has raised concerns among smaller winemakers who rely heavily on US markets to sustain their operations.
Global Trade Challenges
European Commission President Ursula von der Leyen recently warned of the risks to the global economy posed by trade tensions. Speaking at the World Economic Forum in Davos, she emphasized the dangers of “fracturing” economic ties and cautioned against a “race to the bottom” in global trade policies. German Vice-Chancellor Robert Habeck echoed these sentiments, urging Europe to resist external pressures and maintain its economic stability.
In 2023, trade between the EU and the US reached a record €1.54 trillion (£1.3 trillion), underscoring the deep economic ties at stake. As the wine industry braces for potential changes, stakeholders are watching closely to see how Trump’s policies unfold and what they mean for the future of international trade.
