Donald Trump is Ruining European Wineries
Wine growers across the European continent have been struggling due to a decline in consumption from secular demand with consequences so awful that the French government has been paying growers to uproot their vines. Then along comes President Trump with his oft-repeated rhetoric “America First”, threatening tariffs of 200% on European wine, with the result that shipments of the product have completely stopped and owners of vineyards no longer know how to price their bottles.
European wineries are at a loss of exactly what to do, especially now as overseas clients orders are rapidly disappearing, with the result that many brands such as Chardonnay and Merlot will be cellar bound rather than sold. Indeed, in France’s biggest wine cooperative located in Cave Héraclès, there are in excess of 200 steel tanks which by experts’ calculations are as high as a six-storey building and are still full of 2024’s production. The region, as with the rest of Europe, can see the vines budding again, and the next harvest is not that far away.
Owners of these vats are being told to wait by buyers who already have enough wine on their books, and somehow the vats need to be empty by July at the very latest in order to accommodate this year’s produce. Now that President Trump has announced his punitive tariff, he has brought the whole industry to a complete stop. Producers of wine now are unable to commit to a price as they don’t know for sure exactly what the tariff will be. They therefore are unable to commit or offer any discounts as they have no idea what their ultimate costs will be. Furthermore, they could well incur extra costs to empty their vats to store elsewhere to accommodate the new produce.
Sadly for wine producers, there is currently a global glut of product and 2024 saw a slump in production mirroring a 60-year low. Demand for wine is falling at an accelerated rate, with today’s health conscious youngsters drinking less than baby boomers or millennials when they were the same age. A number of savvy brand owners fearing a Trump victory, shipped excess supplies to the United States before Trump won the election. Indeed, Sogrape owner of Mateus Rosé ensured their importer in America has at least six months’ supply, whilst the wine estate Château de Fieuzal also shipped many more bottles than previously planned to the United States.
The wine tariff on European Wines and champagne was announced by Trump as a retaliatory measure against the EU (European Union) for threatening tariffs on American whisky due to come into effect on 14th April 2025. In 2024, the United States accounted for 30% of all of Europe’s wine exports, and the European Commission (handles all trade matters for the EU) is currently working on a concession package to present to the Trump administration in the hope that partial tariffs can be removed. However, with the mood Donald Trump is in, the European wine growers can only hold out hope that the commission is successful.
