Trump’s new trade war target: French wine

June 11, 2019
By Alana House

US President Donald Trump has renewed his threats to do “something” about taxing French wine imports more heavily.

Trump first raised the issue in a tweet in November last year, saying: “France makes excellent wine, but so does the US. The problem is that France makes it very hard for the US to sell its wines into France, and charges big Tariffs, whereas the US makes it easy for French wines, and charges very small Tariffs. Not fair, must change!”

After visiting Normandy for D Day last week, he has told CNBC: “France charges us a lot for the wine. And yet we charge them very little for French wine.

“So the wineries come to me and say, ’Sir’ — the California guys, they come, ’Sir, we’re paying a lot of money to put our product into France, and you’re letting’ — meaning, this country is allowing — ‘these French wines, which are great wines, but we have great wines too — allowing it to come in for nothing.”’

“And you know what?” Trump added. “It’s not fair. We’ll do something about it.”

In 2018, French exports of wine and spirits to the US grew 4.6% to $3.6 billion according to industry data, making the US the most valuable market for France.

When Trump first raised the tariff issue, WineAmerica said it didn’t feel issue was worth fighting over, noting the EU tariffs were only modestly higher than comparable American tariffs.

“The US charges 5 to 14 cents a standard bottle on EU wine … The EU charges 11 to 29 cents a bottle on American wine. So there is a slight disparity. However, not the level that the President seems to imply here,” said Michael Kaiser, vice president at the Wine Institute. “We would support a trade agreement that would make the tariffs more equal, however we don’t want to see this lead to another trade war like we are seeing with China.”

Escalating a trade war with France could cause headaches for bottle shop owners too.

“I’m not going to sell Beaujolais if a tariff causes the price per bottle to go from $20 to $40,” Maurice Amiel, a wine merchant in South Beach, Florida, recently told the New York Times. “I’d have to absorb a lot of the increase.”

Trump Winery

Trump has some personal involvement in the wine business. His son Eric Trump is the owner and manager of Trump Winery in Charlottesville, Virginia.

Washington and Brussels are preparing to begin negotiations on a trade deal to resolve a battle Trump began last year by putting tariffs on steel and aluminum. But EU officials have said repeatedly they will not discuss agriculture.

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