Ongoing tariff confusion disrupts European wine exports

The U.S. fine wine market responded sharply to the threat and subsequent implementation of tariffs on European wine imports this spring. Following the March 13 announcement of a potential 200% tariff and the confirmation on April 2, American buyers reduced their bids significantly. The result was a rapid fall in trade activity and prices across key wine regions, with noticeable impacts on market indices and buyer behavior.

By mid-April, some signs of recovery in U.S. bid exposure began to appear. However, these bids returned at substantially lower values, and overall exposure remains more than 50% below pre-tariff levels across all major wine regions. The Piedmont region has experienced the deepest sustained decline in U.S. interest. This partial rebound coincides with businesses reassessing the financial risk, deciding how much of the tariff cost they can absorb, and clarifying their positions to clients.

U.S. buyers began pulling back from the market even before the formal tariff announcement. Bids were scaled down soon after the initial threat in March, with a more pronounced withdrawal after April 2. Where activity has resumed, the focus has shifted. In April, Bordeaux wines accounted for 43.3% of total U.S. purchase value—well above the region's usual share. This increase suggests a pivot toward classic, lower-risk investments in uncertain conditions.

While a temporary 90-day reduction in EU wine tariffs has provided short-term relief, uncertainty continues to dominate. U.S. buyers remain cautious, awaiting further clarity by July 9, when another policy decision is expected. Concerns persist over rules such as the goods-on-the-water policy, which could affect shipments already in transit.

The broader fine wine market reflected this hesitancy. In April, the industry benchmark Liv-ex Fine Wine 100 index fell 1.7%, the largest drop since August 2023. The broader Fine Wine 1000 dropped 1.3%. The Champagne 50 sub-index was hit the hardest, down 2.6%. U.S. buyers had previously made up nearly half of Champagne trade, so the introduction of tariffs has had an outsized impact on the region's pricing.

Bordeaux was also affected. The Fine Wine 50, which tracks recent vintages of the First Growths, fell 1.9%, while the broader Bordeaux 500 declined by 1.6%. These indices now sit well below their 2020 lows, with the Fine Wine 50 down 9.8% and the Bordeaux 500 down 5.8%.

Amid these market challenges, the 2024 En Primeur campaign continues, though with limited success. Producers have made meaningful pricing concessions. Top estates such as Lafite and Mouton released wines at prices below current market offerings, and smaller producers like Carmes Haut-Brion released at cost or less. However, overall demand remains muted, with few standout successes reported.

Liv-ex Market Analyst Sophia Gilmoure noted that the current market is being shaped more by uncertainty than by the actual level of tariffs. She said that until policy becomes clearer, buying strategies will remain conservative. She also observed a shift in buyer demographics, with Asian demand reemerging, particularly for Burgundy over Bordeaux. Last week, Burgundy attracted more Asia-based buyers on Liv-ex than any other category.

Gilmore added that while producers are making notable efforts, especially on pricing, regaining buyer trust—especially among private collectors who have taken losses in recent years—will be a slow process that goes beyond pricing alone.