After EU-US Trade Talks, French Alcohol Industry on Edge
All-Out Efforts to Secure Duty-Free Benefits for Wine and Champagne
Some Suggest LVMH Chairman Arnault Could Play a Key Role
The French government and the wine and spirits industry are making efforts to secure tariff-free benefits for alcoholic beverages, as tariffs on these products remain undecided in the trade negotiations between the European Union (EU) and the United States. According to Yonhap News, French Finance Minister Eric Longbard urged in an interview with the daily Lib?ration on the 28th (local time) that "tariff exemptions should also be applied to the alcoholic beverage industry." Minister Longbard stated, "The agreement has not yet been finalized. While a 15% tariff rate and some exception clauses have been included, all the details are still undecided," and added, "The government will continue to do its utmost to protect our industry."
Previously, on the 27th, the EU and the United States agreed to impose a 15% tariff on European products imported to the US, while exempting sectors such as the aviation industry, certain generic drugs, and semiconductor equipment from tariffs. As both sides are still finalizing the details, it is expected that the tariff rates for alcoholic beverages such as wine will also become clear during this process.
The issue of alcoholic beverage tariffs is extremely important for France. This is because the United States accounts for about a quarter of France's wine and spirits exports. Last year alone, France exported alcoholic beverages worth 3.8 billion euros (approximately 6 trillion won) to the United States.
Gabriel Picard, president of the French Wine and Spirits Exporters Federation (FEVS), said in a statement on the 28th, "We have avoided disaster by escaping the 30% tariff that was scheduled to take effect from August 1," and added, "We expect this agreement to include the restoration of bilateral tariff-free trade for spirits." He also stated, "Nothing has been decided yet regarding wine," and urged, "The European Commission and the French government must do everything possible until the very end to secure tariff reductions."
Some observers suggest that Bernard Arnault, chairman of LVMH (Louis Vuitton Moet Hennessy), could help in the negotiations with the United States. LVMH subsidiaries include Moet Chandon, famous for Dom Perignon champagne, and Hennessy, considered the world's largest cognac producer.
Chairman Arnault is known to have close ties with President Donald Trump, having attended Trump's inauguration in January this year and visited the White House in May. Previously, when the Trump administration imposed a 25% tariff on European wine in 2019, champagne and cognac were excluded from the tariff hikes, reportedly due to Arnault's influence.
However, European wine exports to the United States have long been cited as a cause of the US trade deficit, as they far exceed the amount Europe imports from California. President Trump has repeatedly expressed dissatisfaction over this. In March, President Trump stated, "I will impose a 200% tariff on all wine, champagne, and alcoholic products from France and other EU countries."
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