Trump slams French wine tariffs. But they're already really low

Senior Economics Correspondent at Yahoo Finance UK
Yahoo Finance UK

US President Donald Trump has lashed out at France in a series of tweets on Tuesday, accusing the country of charging “big tariffs” on US wine imports.

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But, unlike his previous attacks on high Canadian dairy tariffs, he didn’t provide any details about exactly how high these tariffs truly are. Perhaps that’s because the tariffs are really quite low.

“France makes it very hard for the U.S. to sell its wines into France, and charges big Tariffs, whereas the U.S. makes it easy for French wines, and charges very small Tariffs. Not fair, must change!” he said.

In fact, the European Union — a bloc which includes France and 27 other nations — is in charge of setting tariffs, and it levies very modest tariffs on imported wine.

A typical 750ml bottle of wine from the US would face tariffs at the border of just a few cents, according to the European Commission’s online tariff database. Sparkling wine faces some of the highest tariffs, but it’s below 20 cents per average bottle.

“It’s large enough to be annoying, but people can still have access to buy US wine, if that’s what they want to do,” said David Henig, a former UK trade negotiator and director of the European Centre for International Political Economy. “It gives a price preference to domestically produced wines, but it’s not a huge price preference.”

Photo: Andia/Getty Images
Photo: Andia/Getty Images

The US association representing American wineries, WineAmerica, was quick to respond to Trump’s concerns, but said the issue wasn’t worth a fight, noting the EU tariffs were only modestly higher than comparable American tariffs.

“The US charges 5 to 14 cents a standard bottle on EU wine … The EU charges 11 to 29 cents a bottle on American wine. So there is a slight disparity. However, not the level that the President seems to imply here,” said Michael Kaiser, vice president at the WineAmerica. “We would support a trade agreement that would make the tariffs more equal, however we don’t want to see this lead to another trade war like we are seeing with China.”

The Wine Institute, which represents the wine industry in California, has said on its website that “high tariff rates constitute the single most restrictive barrier to US wine exports.” It singled out Japan and India for their high tariffs, and also noted that EU wine tariffs are higher than the US.

“Wine Institute believes the upcoming trade negotiations between the US and EU will create market opportunities by reducing tariffs and addressing other market access issues,” Wine Institute CEO Robert Koch told Yahoo Finance UK.

The EU is the biggest market for American wine in the world, according to WineAmerica. Europeans bought $533m (€472m, £409m) in US wine last year. On the flip side, Americans bought about eight times more European wine, importing $4.5bn (€4bn, £3.5bn) of EU wine last year, according to Wine Institute.

Related: ‘Small country’ Britain is under an ‘illusion’ about Brexit, says ECB exec

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