US taxes: the wine industry calls on the French government for support

A few months ago, Donald Trump, the President of the United States, had already threatened to impose higher taxes on European wines, particularly French wines, sold in his country. His threat was carried out this month. As a result, since October 18, 2019, tariffs on many consumer products have been increased, from 10% to 25%. Some are therefore more affected than others, which is unfortunately the case for wines from French wine-growing regions. For the latter, the increase is 25%. In France, wine is the second most exported product. For professionals, these new taxes are particularly worrying, especially as they will also suffer the effects of Brexit. That's why they recently called on the government to quickly implement support measures.

Sharp rise in customs duties worries several wine-growing regions

For wine industry professionals, this 25% tariff increase is very bad news. Admittedly, it wasn't unexpected, since the President of the United States had already mentioned it. But this 25% rate is pretty hard to swallow. It's not just French wines that are affected, but also those from Spain, Germany and the UK. Nevertheless, in France, this sanction is likely to have serious consequences, particularly for regions exporting mainly to the United States. For example, producers of Chablis are expecting to halve their sales in the US, as the new tax will increase the price of their bottles. And in general, this American sanction will have an impact on the entire industry, as Uncle Sam's country is the leading export market for French wines and spirits, with sales of 3.2 billion euros.

Why did the United States impose sanctions?

For players in the French wine industry, this tax increase is all the more difficult to accept as they are "the collateral victims of a conflict that is not ours", as Antoine Leccia, President of the French Federation of Wine and Spirits Exporters, explains. That's why, on Friday October 18, they asked the government and the European Commission to open negotiations with Washington. In fact, these American sanctions follow on from the subsidies granted to Airbus. From now on, the company's aircraft will cost 10% more in the United States. For Donald Trump, these subsidies mean that Europe is penalizing American companies (Boeing in this case) by erecting "enormous barriers" designed to reduce imports. As a result, he has decided to increase customs sanctions on many products, including wine. Last Monday, October 14, he obtained the agreement of the World Trade Organization, and a few days later, on October 18, they came into force. Now, the industry is waiting for answers from the French government and the European Commission, but as Bruno Le Maire said, the Boeing/Airbus dispute needs to be "resolved amicably". In the meantime, the wine industry will have to get organized.