Fear of Trump's tariffs ripples through France's Champagne Region

Boston Globe

17-03-2025

'A 200% tariff is designed to make sure that no Champagne will be shipped to the United States,' said Calvin Boucher, a manager at Michel Gonet, a 225-year-old Champagne house on the avenue. With 20% to 30% of the 200,000 bottles it makes yearly exported to U.S. wine merchants and restaurants, 'that business would be crushed,' he said, adding that the price of a $125 Champagne would more than triple overnight.
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Épernay sits in the heart of a region that produces the world's finest bubbly. The United States is its biggest foreign market, with 27 million bottles shipped there in 2023, valued at around 810 million euros ($885 million).
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Chardonnay, pinot noir and Meunier grapes blanket the rolling hills and deep valleys of Champagne, which covers more than 130 square miles, from the city of Reims to the Aube river. The area is under France's strict Appellation d'Origine system, which ensures that only the sparkling wine made here, using specific methods, can legally be called Champagne.
With more than 4,000 independent winemakers and 360 Champagne houses, the region produces about 300 million bottles annually, with 1 billion more resting in cellars. The biggest houses -- including Dom Pérignon, Veuve Clicquot and Moët & Chandon, owned by the luxury conglomerate LVMH Moët Hennessy Louis Vuitton -- dominate production, and exports and account for one-third of total sales.
But such figures were of little comfort in the wake of Trump's threat. Just off the Avenue de Champagne, Nathalie Doucet, president of Besserat de Bellefon, a specialty Champagne house that exports 10% of its premium production to the United States, said the trade war made her anxious.
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'We are waiting to see what happens, but it's not good news,' said Doucet, whose Champagne is made with a laborious low-pressure process that gives it a crisp acidity and fine effervescence.
Champagne already had a tough year with bad weather that had reduced the harvest. Consumption has declined as young people shifted habits and switched to cocktails and artisanal beer. Champagne sales have thinned since the pandemic, falling 9% last year.
At the same time, she said, Europe is grappling with wars in Ukraine and the Gaza Strip. And now the trade war with the United States, one of France's traditional allies, over issues that have nothing to do with Champagne, has made her feel like collateral damage.
'It seems like a deliberate punishment,' said Cyril Depart, owner of the Salvatori wine shop, just off the avenue, which offers a wide variety of artisanal Champagnes. His wife was an export manager for one of the big Champagne houses and had already been crunching numbers on the potential impact.
Leah Razzouki, an Épernay resident whose family has worked in the Champagne business for generations, said she was infuriated. 'Many of our friends are small producers and they would be hit very hard,' she said.
The damage of a trade war would spread far beyond Champagne's regal houses, hitting U.S. American importers and distributors and putting numerous small businesses at risk.
Michael Reiss, president of Vineyard Road, a small distributor in Framingham, Massachusetts, that imports Champagne and wines from Europe and distributes them in New England, said small businesses like his, including restaurants and retail shops, would be 'very hurt.' The unpredictable trade environment could force businesses to cancel planned investments, he added.
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Adding to the pain, tariffs applied at the beginning of the supply chain can multiply, as each business handling the product marks it up accordingly, Reiss said. 'So even a 25% tariff can easily lead to a 40% to 60% increase in prices,' he said.
A 200% tariff 'would eliminate the possibility of people buying things that bring them joy in their lives,' he added.
Even inside the Champagne Museum bordering the avenue in Épernay, the chatter strayed to Trump's tariffs. Sacha Raynaud, whose family owns a small Champagne house, had brought a friend to learn the history of Champagne, which first appeared in the 17th century on the tables of royalty, giving the drink its nickname, 'the king of wines.'
'French people are waking up to what's happening in the United States, and starting to speak about boycotting American products,' she said.
Similar worries circulated in the fields. Working in a buttery morning light, a dozen field hands secured knotted brown vines to wires ahead of the spring growing season on freshly plowed earth in the shadow of the Champagne-producing town of Reuil, just west of Épernay.
Even these jobs were at risk, said Patrick Andrade, who runs a small company that helps maintain Champagne vineyards. The 12-hectare (30-acre) plot belongs to a small house that exports to the United States, he said.
Should sales fall, wine producers would need fewer field hands, and there would be less work for tractor operators, cork makers and bottle makers. In the worst case, he added, it could force Champagne producers to consider ripping out vines.
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On Friday, French Foreign Minister Eric Lombard called the trade war 'idiotic' and said he would travel to Washington soon. 'We need to talk to the Americans to bring the tension back down,' he told French television.
France's biggest Champagne houses have stayed conspicuously silent, declining to say anything while waiting to see how Trump's threat would play out -- and whether European officials could get him to back off.
Among them was LVMH Moët Hennessy Louis Vuitton, which sells nearly 35% of its wines and spirits in the United States. The company did not respond to a request for comment.
Outside LVMH's Moët & Chandon mansion on the Avenue de Champagne, a group of Americans snapped selfies in front of a statue of Dom Pérignon, the monk who invented Champagne. Inside the stately building, no staff members wanted to talk tariffs.
Even so, locals whispered rumors that the big houses were upset by the tariff threat, but expected that it could possibly blow over.
After all, some said, Bernard Arnault, France's richest man and the head of the LVMH empire, which dominates much of Champagne's production, has a long-standing relationship with the U.S. president and was invited by Trump to his inauguration. Perhaps Arnault's friendship would prevail at the end of the day, they said.
But for now, that is all just speculation. The reality is that nothing is certain -- and uncertainty is bad for business.
Back at the Michel Gonet Champagne house, Boucher pointed to a display of cuvées that were popular among customers in the United States.
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'It's just a stressful situation because we don't know if the tariffs will even happen,' he said. 'It's not good for anybody.'
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