How bad are President Trump’s proposed 100 percent tariffs on French wines, cheeses, and other luxury products going to be? It depends on who you ask.
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This tariff threat has been kicking around for a while, but it recently got worse. I wrote in the October 18 Wine Advisor, “Trick or treat: Wine tariffs land today,” about reactions to the administration’s 25 percent tax on French, German and Spanish wines, Parmesan cheese, mussels, coffee, single-malt whiskeys and other agricultural goods from Europe.
Last month, before the impact of those tariffs really began to be felt in the U.S., the administration doubled down. On December 2, angry about a new French tax on American technology companies, the administration threatened retaliatory tariffs as high as 100 percent on French wines.
That’s One Hundred Percent, a tax that could double the price of your favorite French bottle or, perhaps more likely, take it off the U.S. market entirely. As of now, this tariff is set to take effect next Tuesday, January 14.
Under the proposed tariff, a a jug of Chateau Margaux would bounce from $727 to $1,454
This is bad, right? If you love French wine as I do, it certainly is. Whether you’re looking at a bottle of La Vieille Ferme escalating from $8 to $16, or a jug of Chateau Margaux bouncing from $727 to $1,454, that’s a serious whack on your wine budget. And the game of back-and-forth may get even worse, as France’s finance minister, Bruno Le Maire, said this week that France would swiftly respond to any U.S. escalation with tariffs of its own, Business Insider reported.
As you can imagine, the wailing and gnashing of teeth from U.S. importers, distributors, retailers and wine consumers is approaching the apocalyptic.
“I have spent 20 years building a wine-import company,” natural-wine importer Jenni Lefcourt wrote in a New York Times opinion piece, “On Jan. 14, the Trump administration could destroy it all by imposing a 100 percent tariff on European wine,” she wrote. “Mine is not the only American business that would suffer. The United States imports over $4.25 billion a year in European wine, which is handled by thousands of importers, distributors, wine stores and restaurants. In recent weeks we’ve all been scrambling to avoid disaster. We are sending emails and letters to clients, begging them to call their representatives in Congress. We are fighting not just to be able to drink European wine; we are fighting for our livelihoods and for our hundreds of thousands of employees.”
Hold that thought as we ponder a contrarian view from Wine-Searcher.com’s W. Blake Gray. “Here is a contrarian opinion,” Gray wrote in an article published today. “Proposed US tariffs on European wine will not hurt the US wine production industry. Nor will they lead to an overall decline in US wine consumption. So stop clutching your berets.”
Look at the numbers, Gray said. “European wine only accounts for about 20 percent of the US market. So 80 percent of the wine in the US will be unaffected. … Chile, Argentina, New Zealand, South Africa and Australia all make terrific wine and are anxious to fill that 20 percent market gap. California producers, after a run of large vintages, are awash in wine. Washington’s largest winery, Chateau Ste Michelle, has been struggling to sell wine.
“If you say you won’t drink wine from these places, and you’ll only drink European wine, then 1) you do not actually love wine, you just love posing as a European and 2) I don’t believe you,” he concluded.
It’s an interesting point of view from the standpoint of the California wine industry, but here’s my problem with it: This argument sets one part of American business – U.S. wine makers and their distributors – against another, perhaps larger, set of importers, distributors, and retailers across the nation.
It’s hard to ignore the reality that Jenni Jefcourt made clear in her Times article, echoed in a Fortune magazine essay by business writer Vivienne Walt.
Quoting a Burgundy wine maker, Walt summed up the view from France: “Your president has imposed a 25percent tariff,” fumes Pierre de Benoist, 45, owner of 74 acres of prime vines called the Domaine de Villaine … “What do we have to do with all this? I’m a winemaker from Burgundy. It is like a teacher who does not know who to punish, so he punishes the whole class.”
It’s not just wine makers who would be hurt by the 100 percent tariff, the article went on, but importers, retailers, even wine consumers. “The 25 percent tariff was deeply painful, but not necessarily a mortal threat to the trade. Trump’s threatened 100percent tariff, on the other hand, would be a seismic jolt. ‘It will pretty much mean the destruction of the modern wine industry as we know it,’ says Steve Melchisky, president and owner of USA Wine West LLC, from his base in Portland, Maine.
“Americans, who consume by far the world’s most wine, produce only about two-thirds of their own; much of the rest comes from Europe. But Melchisky foresees a steep drop in consumption if taxes soar under Trump’s plan. ‘Who would buy a $15 Bordeaux that suddenly costs $35?’ he says. Nobody.”
Want to speak up? Here’s how:
Members of the public can voice their opposition to the proposed tariff before midnight EST this coming Monday, January 13, by visiting this page on the government website Regulations.gov. (Click on the blue Comment Now button in the top right corner to reach the form. Don’t fret about the reference to “Large Civil Aircraft Dispute.” That’s because this whole uproar started with a dispute between French Airbus and U.S. Boeing.)
You may also want to contact your members of Congress via this form from the National Association of Wine Retailers.
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Today’s Tasting Reports
In place of the usual tasting report, here are links to five French wines that I’ve enjoyed and reported to you during recent months. Would I pay double the price for each? That would not be easy for me to do. How about you?
Joseph Faiveley 2015 Bourgogne Pinot Noir
($28. Post tariff, $56)
Find this wine on Wine-Searcher.com
Louis Jadot 2018 Mâcon-Villages Chardonnay
($18. Post tariff, $36)
Find this wine on Wine-Searcher.com
Pascal & Nicolas Reverdy 2017 “Cuvée ‘Les Coûtes'” Sancerre
($29. Post tariff, $58)
Find this wine on Wine-Searcher.com
Domaine Diochon 2017 Moulin-à-Vent Cuvée Vieilles Vignes
($27. Post tariff, $54)
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Domaine du Haut Bourg 2015 Muscadet Côtes de Grandlieu sur Lie
($12. Post tariff, $24)
Find this wine on Wine-Searcher.com
More affordable wines
Want tips to still more good, inexpensive wines? Here are Wine-Searcher links to vendors and prices for a bunch more wines for $10 or less that I’ve told you about during the past year or two. Please tell us about your favorites!
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