In the two-plus weeks since the Trump Administration abruptly announced 25% tariffs on wines below 14% alcohol from France, Germany, Spain and the UK, virtually every wine maker has sprinkled a big dose of anxiety into the natural stress of harvest. Announced October 2, the tariff goes into effect today.
After spending the last 10 days visiting wineries in Germany and Alsace, I can attest that this worry runs wide and deep. A weekend of hot sun, followed by a couple of days of chilly rain, sent everyone into “emergency” mode to finish harvest. (Harvest wrapped up in Alsace this week, for most on Tuesday. In Germany, wineries were hoping to finish today at the latest.) Now moving quickly from the vineyard into the winery, for winemakers there hasn’t been time to focus on a strategic response — only time enough to worry until the details of the situation get sorted out.
For many French and German wineries, the U.S. is its primary export market. This is a big hit, fashioned in retaliation for unrelated trade issues in the aerospace industry. Preliminary analysis by industry watchers is that the impact will be far-reaching. As reported on VinePair, “These tariffs are like water damage in an old house. What you see is bad, but what lies beneath is much, much worse.”
- Not only will your favorite Grand Cru Burgundy or Rioja Riserva cost at least 25% more for any wine not already in local markets, but the price pressure may stifle growth and innovation in European wine industries.
- Pressure may be even more dramatic in value wine categories as price-sensitive wine drinkers look to more affordable options from other regions.
- California farmers fearing a recession, and tourist industry workers in wine shops and restaurants, may be swept up in collateral damage.
- Potential for European Union retaliation on U.S. wine exports would exacerbate today’s global supply issues.
The best news for the French and German wine trade is a lesson learned after the U.S. “Great Recession”: diversify, diversify, diversify. Many wineries caught short when the U.S. wine market cratered in 2008-09 have aggressively courted China, England, Scandinavia, and nearby European countries.
Less reported or understood is that imported cheese is being swept up in the tariff mess. Ireland, Greece, Poland, Sweden, Finland and Italy are targeted in “cheesegate.”
This is just a mess. I, for one, am enjoying Cremant d’Alsace and local cheese as I write this story…and plan to carry on supporting my favorite wines!