France Fights to Shield Champagne from U.S. Tariffs in High-Stakes Trade Talks

Uncertainty over EU-US deal casts doubt over wine and spirits, threatening prices and global sales

Champagne and Spirits at Risk in Latest Transatlantic Trade Deal

France is urgently lobbying to exempt champagne and other alcoholic drinks from newly announced U.S. import tariffs, as final details of the EU-US trade agreement remain unclear ahead of its scheduled implementation this Friday.

While the 15% tariff is confirmed to apply to most EU goods entering the United States, there is confusion about which sectors will be excluded. The EU has secured exemptions for certain categories like aviation and chemicals, but alcohol remains in a grey zone.

French Officials Push for Clarity

France’s finance minister Éric Lombard has urged that the exemptions granted to the aviation industry should also cover alcoholic exports, citing the importance of the sector to European trade.

Junior trade minister Laurent Saint-Martin added that France believes spirits such as cognac may already be exempt, though no final list has been released. “We seem to be further along on spirits than on wine,” confirmed one EU official.

However, U.S. trade representatives have suggested that no exemptions will be granted for wine or spirits, including champagne—a stance which, if finalised, could send shockwaves through the industry.

Why This Matters: France’s €12 Billion Export Powerhouse

France is the largest alcohol exporter in the EU, shipping €12.1 billion worth of wine and spirits in 2024, with over 30% of those exports heading to the U.S. Italy, the bloc’s second-largest alcohol exporter, is backing France’s calls, having exported €6 billion in alcoholic beverages last year.

Top French producers—including LVMH (Moët & Chandon, Hennessy), Rémy Cointreau, and Pernod Ricard—stand to lose significantly if tariffs are imposed. Bernard Arnault, LVMH’s billionaire chairman, has even taken the unusual step of lobbying U.S. and EU officials directly, calling the situation a “critical moment” for European viticulture.

Industry Braces for Potential Price Rises and Slump in Sales

If tariffs go ahead, prices for French wines, cognac, and champagne in the U.S. could rise sharply, making them less competitive compared to domestic or other international brands. A 10% tariff introduced in April already cut revenues by 12%, exacerbated by poor exchange rates.

Industry groups like CEEV and the French Wine and Spirits Exporters Association have warned that a 200% tariff, once floated by the Trump administration, would be “catastrophic”. They also say investment in the sector has been stalled since threats of tariffs first emerged.

Currently, EU spirits and beer enter the U.S. duty-free, while wine faces a modest duty of $0.06 per litre, and sparkling wine $0.20 per litre. Any significant increase would likely be passed on to consumers.

Conclusion: A Critical Week for European Alcohol Exports

As France fights to protect its flagship exports from U.S. tariffs, much hangs in the balance for wine and spirits producers across the EU. Without firm exemption, the industry faces price hikes, reduced competitiveness, and declining sales—especially in the all-important American market.

With the final list of exemptions due Friday, and global players like LVMH watching closely, the coming days could shape the future of Europe’s most iconic drinks. Whether sipping champagne becomes a more expensive luxury in the U.S. may depend not on vineyards, but on diplomats.

Sources: (BBCmoney.co.uk, Reuters.com)