Burgundy, a prestigious French wine region, heavily relies on the US, its largest export market. However, Donald Trump’s tariffs threaten to significantly impact the region’s economic viability.
Amidst a spring rain, vineyard worker Élodie Bonet meticulously prunes vines, ensuring optimal grape growth. This careful process underscores the dedication inherent in Burgundy’s wine production.
“We focus the vine’s energy on the shoots bearing flowers, ensuring a robust grape yield,” she explains.
At the Domaine Cécile Tremblay winery in Morey-Saint-Denis, owner Cécile Tremblay shares her prized wines, stored amongst aged oak barrels and time-worn bottles.
The cellar boasts renowned appellations: Nuits-Saint-Georges, Echezeaux, Vosne-Romanée, Clos-Vougeot, and Chapelle-Chambertin—names synonymous with excellence in the wine world.
Ms. Tremblay exports over half her production under the Domaine Cécile Tremblay label, with approximately 10% destined for the United States.
“The US market represents a substantial portion of my business,” she states.
Following initial threats of a 200% tariff on European alcohol, President Trump implemented a 20% tariff on most EU products on April 5th, later reduced to 10%, with further increases possible. A future 50% tariff on all EU goods looms.
Ms. Tremblay acknowledges the concern: “Yes, of course, like everyone else,” expressing the widespread anxiety amongst French winemakers.
Seeking further insight, I meet François Labet, president of the Burgundy Wine Board, representing 3,500 winemakers.
“The US is our largest export market, both in volume and value,” he confirms. Prior to the current trade disputes, the US market experienced significant growth.
While overall French wine and spirits exports declined 4% last year, Burgundy wine exports to the US increased by 16% in volume, reaching 20.9 million bottles valued at €370m.
Mr. Labet notes that the US accounted for approximately a quarter of Burgundy’s wine exports last year.
Burgundy’s reputation rests primarily on its Pinot Noir red wines, though the region also produces significant quantities of Chardonnay white wines, including the popular Chablis, as well as Crémant de Bourgogne sparkling wine and rosé.
This diversity benefits Burgundy, as white and sparkling wine consumption remains strong, while red wine consumption is declining. Burgundy’s lighter reds are also increasingly popular, contrasting with heavier New World wines.
“There’s a noticeable decrease in consumption of full-bodied, high-alcohol, heavily oaked red wines,” Mr. Labet observes, highlighting the region’s alignment with evolving consumer preferences.
Mr. Labet recalls a previous 25% tariff imposed by President Trump, resulting in a 50% drop in US exports. He anticipates a shared cost burden between producers and importers to mitigate the current 10% tariff.
However, a 20% tariff would severely impact the market, potentially mirroring the 2019 situation. The broader implications for French wines are even more concerning.
Jerome Bauer, president of the French National Wines and Spirits Confederation, highlights the significant losses (approximately $600m) during the previous tariff imposition, emphasizing the gravity of the current threat.
Mr. Bauer advocates for free trade, a position understandable given France’s wine and spirits trade surplus with the US. Surprisingly, even US winemakers share this sentiment.
Rex Stults of Napa Valley Vintners expresses deep concern, emphasizing the interconnected nature of the wine industry and the negative impact of tariffs on both US and international producers.
“Tariffs hurt everyone,” he explains, citing the devastating impact on US wine exports to Canada as a direct consequence of these trade disputes.
Mr. Stults concludes by stating: “We simply want a level playing field for fair competition. That’s our goal.”
This follows a court ruling temporarily blocking some of the administration’s trade tariffs.
The impact on UK-US trade is likely to be minimal.
Despite legal challenges, the President’s stance on tariffs appears resolute.
The White House criticizes “activist judges” following the legal reprieve on import taxes.
BBC Verify analyzes the implications of this development for US and global trade.