Trump's 200% tariff on EU wine could pop the Champagne bubble… and that's a massive problem

Independent

16-03-2025

The news cycle regarding tariffs is giving me flashbacks to my teenage history lessons, stirring memories about the repeal of the Corn Law and WE Gladstone's subsequent budgets that removed nearly all protectionist regulations – Mr Bromfield, if you're reading this, I hope you're impressed.
Whilst economics is not my strength, I am aware that most economists assert that free trade is generally regarded as a good thing: more choice for consumers, competitive pricing and greater economic growth. Trump obviously hasn't got that memo.
You might be wondering what a wine writer is doing wading into this murky water of tariffs – well, so am I, but it's because of one thing: the threat of tariffs on booze from the EU. Normally I'm writing about my despair at our own country's approach to alcohol taxation, but Trump is rather stealing the headline on pretty much everything, so it might as well include this too.
On Thursday, Donald Trump threatened to impose 200 per cent tariffs on wine, including Champagne and spirits from the EU. This came in response to the launching by the EU of a series of countermeasures 'to protect European businesses, workers and consumers from the impact of these unjustified trade restrictions', which were a response to the United States imposing tariffs of up to 25 per cent on imports of steel, and certain products containing steel and aluminium from the European Union and other trading partners.
Not one to mince his words, Trump declared the European Union to be '… one of the most hostile and abusive taxing and tariffing authorities in the world, which was formed for the sole purpose of taking advantage of the United States'. Spoken like a true narcissist, I mean, best not point out that it was actually created following the Second World War in order to create a peaceful and united Europe, preventing future conflicts and forging economic cooperation – something the tangerine one is trying his hardest to undo. But back to the tariffs.
As part of the list of items that the EU is proposing to implement tariffs on, bourbon is cited (along with motorbikes and peanut butter), and this is where the counter-attack has come in.
'If this tariff is not removed immediately, the US will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER EU REPRESENTED COUNTRIES. This will be great for the wine and Champagne businesses in the US.' (I can't stand it when PEOPLE USE CAPS!)
Sidenote on Champagne: I am not sure that President Trump is aware of the trade agreement between the EU and the US in 2006 that stipulated that 'Champagne' is legally protected and can only be used for sparkling wine produced in the Champagne region of France, and that new uses of "champagne" (and other semi-generic terms) on domestic wine labels would not be allowed. Only brands producing 'champagne' in the States before 2006 were allowed to keep using the name. Glass of 'Cook's champagne' anyone?
According to data from the American Association of Wine Economists (AAWE) over 80 per cent of America's wine imports come from the EU totalling $5,412 million, with the majority of this coming from France and Italy. These tariffs would be utterly decimating.
The colossal impact on producers, importers and American consumers can't be overstated. We have seen firsthand what tariffs imposed on wine can do in the case of Australia and China.
In 2020, China imposed tariffs of over 200 per cent on Australian wine, making it unviable for Australian producers to export wine to China. The devastating impact of this was an estimated loss of $1.37 billion in the first year after China was effectively closed off, and global exports dropped by 30 per cent in value during the period. Australia is still recovering.
And perhaps Trump hasn't considered the impact on American wine companies involved in producing and importing wine to the States such as E&J Gallo, who are responsible for the largest selling sparkling wine brand in the US, La Marca, made in, you guessed it, Italy.
One can't help but cynically wonder if this is a strategic way to boost Eric Trump Wine Manufacturing, better known as Trump Winery – the East Coast's largest winery, producing nearly half a million bottles each year.
And whilst the president may be tee-total, it hasn't prevented the release of The Presidential Reserve: Inaugural Edition, a sparkling wine, limited to just 4,547 cases, and priced at $245.47 per bottle – pretty clever with the numbers, eh? Oh, and the bottle design isn't very original – it looks remarkably similar to Louis Roederer's Cristal.
I sadly have no idea where this will end up; none of it feels positive. Trump needs to take a breath – his unrelenting attack on everyone and everything is getting exhausting to say the least.
My only shred of light is that wine has been at the whim of taxation and wars for hundreds of years in one form or another; you only have to look to Anglo-French relations in Bordeaux for that.
So, whilst this may pose staggering challenges, we can only pray that the resilience of wine, something that is far more enduring than Trump, will triumph.