Concerns raised over US 200% tariff threat on EU wines, as escalation disrupts global supply chain: experts
SOURCE / ECONOMY
Concerns raised over US 200% tariff threat on EU wines, as escalation disrupts global supply chain: experts
Trade escalation disrupts global supply chain: experts
Published: Mar 14, 2025 10:25 PM
A wine merchant from Hungary displays a bottle of wine produced in Hungary's Tokaj wine area during the 24th China International Fair for Investment and Trade (CIFIT) in Xiamen, southeast China's Fujian Province, Sept. 8, 2024. Covering around 120,000 square meters, the four-day CIFIT opened here on Sunday and draws visitors from 119 countries and regions, of which about 80 percent are Belt and Road Initiative (BRI) partner countries. This year's CIFIT highlights the digital economy, new energy and green innovation. It is expected to serve as a platform for more than 80 investment events and roadshow activities. (Xinhua/Wei Peiquan)

A wine merchant from Hungary displays a bottle of wine produced in Hungary's Tokaj wine area during the 24th China International Fair for Investment and Trade (CIFIT) in Xiamen, southeast China's Fujian Province, Sept. 8, 2024. Covering around 120,000 square meters, the four-day CIFIT opened here on Sunday and draws visitors from 119 countries and regions, of which about 80 percent are Belt and Road Initiative (BRI) partner countries. This year's CIFIT highlights the digital economy, new energy and green innovation. It is expected to serve as a platform for more than 80 investment events and roadshow activities. (Xinhua/Wei Peiquan)



EU members and wine industry players have expressed firm opposition to the 200-percent tariff threat on Thursday from US President Donald Trump on all wines, champagnes, and other alcoholic beverages from France and other EU member states after the bloc announced on Wednesday a 50-percent tariff on American whisky.  

Experts said on Friday US consumers would bear the cost resulting from the potential tariffs on wine, stressing that tariffs would further impact global trade along with the industrial and supply chains. 

France, one of the biggest European wine and spirits exporters, was among the first to respond. The wine and spirits sector is the country's third-largest revenue generator. French Minister Delegate for Foreign Trade Laurent Saint-Martin warned on Thursday that France would retaliate if Washington follows through on its tariff threat. "France remains determined to respond with the European Commission and our partners," he said on his X account, emphasizing that neither France nor the EU would give in to pressure, the Xinhua News Agency reported.

French Foreign Ministry spokesman Christophe Lemoine echoed the stance, saying that there would be an "immediate, firm, and appropriate" response if Washington enforces the new tariffs, according to Xinhua. 

Europe sends more than 4.5 billion euros ($4.89 billion) worth of wine each year to the US, its largest export market, according to the Comité Européen des Entreprises Vins, which represents the European wine industry, the BBC reported. 

Ignacio Sánchez Recarte, secretary-general of the group, said if Trump carried through on his threats, it would destroy the market, costing thousands of jobs. "There is no alternative to sell all this wine," he said, pleading with the two sides to "keep wine out of this fight," according to the BBC. 

Wine is a significant product category in the trade between the US and the EU, primarily due to the industry's inherently domestically oriented characteristics. Given the substantial differences in their industrial structures and supply chains, any retaliatory measures targeting each other's wine sector could rapidly proliferate across multiple sectors that could further impact global production and supply chains, Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Friday. 

European Commission (EC) President Ursula von der Leyen said Thursday the EU trade commissioner would be having a phone call Friday with his US counterpart, AP reported. "We have always said at the same time that we will defend our interests. We've said it, and we've shown it, but at the same time I also want to emphasize that we are open for negotiations," she said. 

EU consumers have also been calling for a boycott of US products to show opposition to the trade tariffs.  

Several Facebook groups have been set up in recent weeks aimed at organizing boycotts and campaigns. A Swedish group called "Bojkotta varor fran USA" in Swedish, meaning "Boycott goods from the US," had almost 80,000 members. A survey by the research group Civey for the business newspaper Handelsblatt found that 64 percent of Germans would prefer to avoid US products if possible, with a slim majority saying Trump's policies are already influencing their choices when shopping, per the report, according to Deutsche Welle. 

In addition to the opposition from the EU, the 200-percent tariff threat also raised concerns among US merchants and industry players in the sector. 

"These tariffs, if they are enacted, would absolutely shatter beloved businesses in every city in America," said Ben Aneff, the managing partner of Tribeca Wine Merchants, in New York City, and president of the US Wine Trade Alliance, The New York Times reported. 

US consumers will be paying for the tariffs rather than the Europeans, He Weiwen, a senior fellow at the Center for China and Globalization, told the Global Times on Friday. 

American consumers are facing significant pressure, while rising costs are increasingly limiting their purchasing options. As suppliers and retailers may alter their sourcing strategies when confronted by price volatility, consumers could encounter shortages of previously accessible products regardless of their purchasing power, Zhou said. 

Stocks in the US and EU both fell on the tariff threat on Thursday. The S&P 500 finished the day more than 10 percent below its record high reached last month. The pan-European Stoxx 600 ended the session 0.15 percent lower with sectors diverging, according to media reports.  

Responding to the US tariffs on EU steel and aluminum imports, the EC on Wednesday said it has launched swift and proportionate countermeasures on US imports into the EU. The EU countermeasures could therefore apply to US goods exports worth up to 26 billion euros, matching the economic scope of the US tariffs, the EC said in a statement. 

Tesla, the electric car company run by Elon Musk, said this week that retaliatory tariffs against US manufacturers could harm its operations and that the US should carefully consider its trade policies, CNN reported.  

Past tariff actions by the US, Tesla wrote in a March 11 letter to US Trade Representative Jamieson Greer, increased the cost of US-manufactured vehicles for the company and when those vehicles are exported out of the US, per the report.

In addition to burdening US consumers, He Weiwen said the new US administration's tariff approach would add more serious arbitrary restrictions on global trade while disrupting the logistics flow, and causing disruption to supply chains in different industries. He added that tariffs would also undermine multilateral trade rules. 


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