France fears losses of €1 billion due to US tariffs

French wine and spirits exporters are facing significant challenges after the United States announced a 15% customs duty on their products. The decision follows the release of details from a new trade agreement between the European Union and the United States, which confirmed that wines and spirits would not be granted tariff exemptions. The basic rate of 15% will apply to these goods, a move that has raised concerns among French officials and industry leaders.

The announcement came after months of negotiations between the EU and U.S., with the final terms made public in August. French Agriculture Minister Annie Genevard expressed her concern on social media, highlighting the absence of a tariff exemption for wines, spirits, and other agricultural products. She described the measure as worrying for sectors that are both culturally and economically important to France.

Gabriel Picard, president of France’s federation of wine and spirits exporters, warned that the combined effect of the new tariffs and unfavorable exchange rates could reduce annual French sales to the U.S. by about €1 billion, or roughly $1.17 billion. He described the outcome as a huge disappointment for exporters who rely heavily on the American market.

The United States is a key destination for French wines and spirits, particularly champagne. The U.S. accounts for 10% of champagne exports by volume and 15% by value, making it the largest export market for this iconic French product. Frederic Zeimett, CEO of champagne producer Leclerc-Briant, emphasized the importance of maintaining a strong presence in the U.S., calling it a rich and growing market with consumers who appreciate French culture and lifestyle.

Producers warn that the new tariffs will likely lead to higher prices for American consumers. Zeimett estimated that a bottle of his champagne could increase by $20 in U.S. stores, reaching around $70 per bottle. He noted that this price hike could threaten jobs throughout the supply chain in both France and the United States.

The timing of these tariffs adds to existing pressures on French exporters. The sector is already dealing with a weaker dollar compared to the euro, which makes French products more expensive in the U.S. market. Industry leaders say there are few alternative markets that can quickly compensate for any decline in American sales.

Despite these challenges, some producers are considering ways to remain competitive in the U.S., even if it means adjusting their pricing strategies. Zeimett said he is committed to staying in the American market and will look for ways to preserve his company’s leading position there.

The European Commission has pledged to continue advocating for preferential treatment for wines and spirits in future negotiations with Washington. For now, however, French exporters must prepare for a period of uncertainty as they assess how these new tariffs will affect their business in one of their most important international markets.