The head of EU wine trade body Comité Européen des Entreprises Vins (CEEV) has warned winemakers will struggle to "reabsorb" exports to the US in the wake of the country's 20% tariffs on imports from the bloc.
Speaking to Just Drinks, CEEV secretary general Ignacio Sánchez-Recarte said producers will “have to re-evaluate” their export strategy after the introduction of the 20% levy, which is due to start on Wednesday.
President Trump unveiled a universal “baseline” tariff of 10% on all imports into the US, which comes into effect on Saturday but some nations and trading blocs face higher levies.
Sánchez-Recarte stressed: “There is no other market that will, in the short or medium term, reabsorb the volumes that we were sending to the US, so there will be a disruption in any case.”
The US makes up 28% of EU wine exports, he explained. “[The] US market was a good one… it was a simple market”.
Asked whether producers will have to change their exports strategies, Sánchez-Recarte said many companies have already started re-assessing their plans. “We’ve been putting more emphasis on Mexico and Canada and Japan, on China,” he said.
EU wine imports have already been affected by the trade tension, with shipments drying up since the middle of last month, when the European Commission announced its plans for counter-tariffs in reaction to Trump’s levy on steel and aluminium. Those proposals sparked a threat from Trump to place a 200% tariff on the EU’s alcohol imports to the US.
The EU has yet to follow through with its plans. After Trump announced his 20% tariff on all EU products yesterday, European Commission president Ursula von der Leyen said the bloc was preparing counter-measures.
“All the importers have halted all the imports because if they are buying a product… and when the shipment arrives to the US port, there [might be] a surprise that they have to pay a 200% risk they cannot encounter," said Sánchez-Recarte.
“We are losing right now €100m ($110m) per week because of the announcement. This 20% will not change [the situation] immediately because we are already in a no-market-access situation.”
All EU wine-producing countries are impacted by US tariffs but France and Italy are the most affected, exporting the most in value, followed by, Spain, Germany and Portugal, according to the CEEV.
Producers will need to wait to see how the European Commission plans to respond to with its counter-measures to the US’s tariffs on steel and aluminium imports later this month.
Its first set of tariffs on US goods, which include a levy on Bourbon, were delayed last month to the middle of April in a bid to align with another set of countermeasures due to come into play on 13 April.
This second set includes a levy on food products like meat, seafood, dairy and confectionary, and drinks like beer, wine, gin rum, Tequila and non-alcoholic drinks derived from milk.
Sánchez-Recarte said the EU wine sector will need to see “if we have two problems or only one, and then companies will sit down and will have to reflect about price strategy”.
As many EU wine businesses have already been sending shipments in advance since October, there should not be a major impact in the short term.
Sánchez-Recarte cautioned, however, the problem with the new US 20% tariff was how this could impact prices and the competitiveness of EU winemakers in the country.
“The main problem 20% is not that the market is closed for you directly but because of the price, the structure of the price, you will be ejected, most probably, from the target price in which you are the segment price in which you are working,” he said.
