The Trump administration has targeted an expansive list of European wines and spirits as well as hundreds of other luxury and commercial goods to retaliate for illegal EU aircraft subsidies as well as a proposed French revenue tax that would affect American tech giants, such as Google and Facebook, working in that country. A 25-per-cent tariff imposed in October on a number of wines and spirits from Europe may soon be replaced by a proposed 100-per-cent tax on an even wider assortment of imports from the EU. The U.S. Trade Representative (USTR), which is the government agency responsible for developing and co-ordinating the country’s international trade, published the expanded list of products under consideration for tariff increases on Dec. 12. The list includes a wide range of foods, beverages and other products including makeup, china and handbags.
Consumers and companies who import, distribute and sell European goods in the United States were quick to rally public opinion.
Representatives from American wine importers and retailer operations, many of which are family-run businesses, attended a trade office hearing Jan. 7 to lobby against duties they say would harm American companies, workers and consumers more than producers. The sanctions will also have little effect on resolving issues in the unrelated aircraft and digital-service industries.
Closer to home, it’s doubtful we’ll see a steady supply of discounted Champagne and Chablis available any time soon.
The United States may be the one of the largest importers of European wine, but the country is far from essential to the bottom line of the most prestigious premium wine producers. (Smaller independent producers with less of a global vision will feel the crunch more.) With strong sales in other EU countries and a booming Asian market, they are other channels to consider.
Early reports suggest European wineries feel they will be able to wait out a short-term trade conflict.
As David Ratignier, vice-president of the Inter Beaujolais Association, explained during the release of the new vintage of Beaujolais Nouveau in November, one tweet from President Donald Trump could end the trade dispute. “If Trump changes his mind overnight, everything will be okay,” he said.
Should the dispute continue or escalate, Canadian import agents expect to be offered increased allocations and, possibly, lower pricing to absorb some of the fallout.
“We are not yet being offered lower pricing, but I do expect to receive increased allocations,” says Harris Davidson, managing director of Rogers & Company, a wine importer operating in Ontario. “If the 100-per-cent tariff is implemented, and pending the duration, I do expect lower pricing as well.”
The bigger issue, however, is that provincial liquor boards’ long lead times mean it would be many, many months before any impact could be felt.
The most promising opportunity may be for well-positioned Canadian wineries looking to make some gains in the U.S. market. Value-priced wines that present classic character, such as the best of our chardonnays, rieslings or cabernet francs from British Columbia or Ontario, might find an audience with consumers looking at having to pay twice the price for their favourite labels from Europe.