Grapevines across southern France’s famed wine region have barely begun to bud, but the season has already turned sour for many of Europe’s top producers.
“We have one [worker] that left … because we couldn’t pay him anymore,” said Nadine Auray, who with her husband, Pierre Jauffret, and a small staff runs Château Terre Forte, outside of Avignon.
“So that’s one guy out of a job and we have to find some other markets.”
Jauffret says U.S. President Donald Trump’s tariff threats are already a disaster for both French producers and American wine consumers.
“I think he will kill the wine market in the U.S.A.,” said Jauffret.
Trump has threatened Europe’s alcohol producers with a catastrophic 200 per cent tariff as part of a nasty tit-for-tat trade dispute that Trump himself initiated. It began with U.S. action against aluminum and steel, but now includes cars and car parts and wine.
“We should have an order in April for the U.S. markets, and today they said they won’t order,” Auray told CBC News during a visit to the winery earlier this week. “It’s our main importer in California.”
Tariffs are paid by importers as they enter the United States, and since shipments are ordered far in advance and take months to arrive, it’s impossible for U.S. buyers to know what they’ll be paying or whether customers will be prepared to cover the extra markup.
Exports crucial
Château Terre Forte produces approximately 15,000 bottles a year — mostly red — on 25 hectares of vineyards. Seventy per cent of the couple’s wine is exported, and while Canada is actually their biggest foreign market, the 10 per cent that goes to California and New York is extremely important, says Auray.
She says the distributor who called off the sale this week was deeply apologetic, but said they couldn’t take the chance of being stuck with thousands of bottles of French wine that could end up more expensive than they had planned.
“[The importer] said he was sorry for us, and I was sorry for them. They know their own business could go down and die because of these tariffs,” Auray said.
Europe exports more than $14 billion US of booze and wine to the U.S. each year. French wine accounts for just over $2 billion of that.
The French industry had already been grappling with broadly decreasing global sales, resulting from other trade disputes with countries such as China, as well as the impacts of climate change and an overall decline in alcohol consumption worldwide.
On Friday, the EU unveiled a host of support measures for the industry that it had been working on for months, including extra financial help to promote tourism, foreign advertising campaigns and cutting red tape for growers.
Retaliation question
Exactly what Trump and his officials have in mind for European alcoholic products is uncertain.
The U.S. president has threatened to hit all EU imports with a potential 25 per cent tariff, which would in theory include wine. Then, there could be other duties triggered by European retaliation.
After the U.S. imposed duties on European steel and aluminum earlier this month, Trump raised the spectre of the 200 per cent penalty on alcohol should the EU hit back against American whiskey.
The retaliation question came up again this week, after the U.S. said all European vehicles will face a 25 per cent tariff starting on April 2. European trade officials left a meeting with Trump officials at the White House despondent, saying it appeared tariffs of at least 20 per cent were inevitable.
Wine producers say given Trump’s unpredictable edicts and misinformation, it’s impossible to know how they should respond in the weeks and months ahead.
“How can you find a strategy for someone who has none — because [Trump] has no strategy,” said Auray, claiming it feels like producers are living on “quicksand” with all the uncertainty.
During his first term as president, Trump imposed 25 per cent duties on a smaller selection of EU-produced goods, including many wines, as punishment for European airline subsidies. Those penalties were lifted in 2021, after Joe Biden became president.
Ulterior motive?
Paris-based economist Anne-Sophie Alsif says she believes Trump is using tariffs to drive EU negotiators back to the bargaining table over a separate issue, involving laws that regulate how U.S.-based tech giants can operate in Europe.
The EU has vigorously pursued multiple antitrust cases against big U.S. tech firms such as Google, Microsoft and Apple, arguing these companies have abused their dominant positions, stifled competition and harmed consumers. Two new EU laws, the Digital Services Act and the Digital Markets Act, have also attempted to enforce standards on misinformation and hate speech.
“I think that all these aggressive [U.S.] trade policies are perhaps to review this tech deal, and to have more favourable conditions for American companies regarding digital,” said Alsif.
In trying to fight back against Trump’s tariff measures, Canadian and European governments find themselves joined in a common cause — but not necessarily one they are inclined to fight together.
“We will fight the U.S. tariffs with retaliatory trade actions of our own that will have maximum impact in the United States and minimum impacts here in Canada,” Prime Minister Mark Carney said at a news conference on Thursday, possibly trying to distance Canada from any reciprocal measures Europe takes.
Prime Minister Mark Carney is heading to Europe to shore up support for Canada amid a trade war with the U.S., as his cabinet works to diversify the country’s trading partners.
Nonetheless, in a social media post later that day, Trump linked the Canadian and European actions anyway.
“If the European Union works with Canada in order to do economic harm to the USA, large scale tariffs, far larger than currently planned, will be placed on them both,” he posted.
Looking elsewhere
Some French wine producers have already started the long, tedious process of trying to find new markets.
Marin Stoffer, with champagne maker Roger-Constant Lemaire, says his operation, based not far from the French city of Reims, is one of them.
“We are going to Canada in May, to Calgary and Vancouver … we also have to target other markets and look for the opportunities up there,” Stoffer told CBC News.
But he added that opening new markets is time-consuming and often doesn’t pay off, especially when the United States is the top international market for French champagne.
Roland Lescure, a deputy in the French National Assembly who represents overseas French citizens in Canada and the U.S., said “French people are worried.”
A dual Canadian citizen who held prominent roles in Quebec’s Deposit and Investment Fund, said the position of France’s government for the moment is to encourage negotiations rather than immediate retaliation. Although he admits it could eventually come to that.
“We need to be firm. We need to be strict. We need to be strong,” said Lecure, during a CBC News interview in Paris. “But also be wary that if we do go into that commercial trade war, we all are going to lose.”
Lescure told CBC that Trump’s trade war, along with his dressing down of Ukrainian President Volodymyr Zelenskyy in the Oval Office and his embrace of Russian narratives over the war in Ukraine, have contributed to a precipitous drop in how French people perceive the U.S.
“Only 20-plus per cent of French people truly believe that the U.S. is their ally,” he said. “That’s a major change — I mean, this has changed overnight.”
