The vineyards of Burgundy, France, are home to some of the world’s most revered wines, commanding global prestige and drawing significant demand, particularly from the United States. As the largest export market for this celebrated region by both volume and value, the US plays a critical role in Burgundy’s economic health. However, recent developments regarding US tariffs under the Trump administration have cast a long shadow over this vital trade relationship, leaving winemakers deeply concerned about their future.
Even amidst a thin spring rain, the painstaking work continues in the vineyards. Employees like Élodie Bonet meticulously prune shoots, directing the vine’s energy towards future grape clusters. This dedication to quality is the foundation of Burgundy’s reputation, but external economic pressures now threaten to undermine this tradition.
At her winery in Morey-Saint-Denis, Cécile Tremblay, owner of Domaine Cecile Tremblay, speaks with quiet worry. Surrounded by aging oak barrels and bottles bearing the names of legendary appellations like Nuits-Saint-Georges, Echezeaux, and Vosne-Romanée, she explains the importance of the US market, which accounts for about 10% of her production – a significant portion for her estate. Like many of her peers, she admits to being deeply worried, but is cautious with her words, reflecting a widespread fear among French winemakers of saying anything that could further escalate tensions.
A Booming Market Under Threat
Prior to the reintroduction of significant tariffs, the US market for Burgundy wine was experiencing robust growth. While overall French wine and spirits exports saw a general decline last year, Burgundy sales to the US surged. In 2024, the volume of Burgundy wine exported to the US increased by an impressive 16%, reaching 20.9 million bottles. This translated into revenues of €370 million (approximately $415 million / £312 million), marking a substantial 26.2% increase from the previous year. The US market represented roughly a quarter of Burgundy’s total wine exports during this period.
This growth wasn’t limited to Burgundy’s famous red Pinot Noir. While English speakers often associate “burgundy” with a color synonymous with rich reds, two-thirds of the region’s actual wine production is white, primarily from the Chardonnay grape. Popular appellations like Chablis are particularly favored in the US. Burgundy also produces increasingly successful sparkling wine (Crémant de Bourgogne) and a small amount of rosé. This diversity is beneficial as global trends show declining red wine consumption, stable white wine sales, and rising popularity for sparkling wine. Furthermore, the lighter-bodied, lower-alcohol reds typical of Burgundy’s cooler climate align with a growing consumer preference away from heavier, higher-alcohol ‘New World’ styles.
The Escalating Tariff Situation
The current anxiety stems from a series of tariff actions and threats originating from the US government. Initially, there was a threat of a steep 200% mark-up on European alcohol. This was followed by a 20% tariff implemented on practically all European Union products on April 5th. Although this was lowered to 10% just four days later, the threat of hiking it back up to 20% in July, depending on trade negotiations, looms large. Adding to the uncertainty is a future threat of a potentially devastating 50% tariff on all EU goods.
François Labet, president of the Burgundy Wine Board, which represents the region’s 3,500 winemakers, vividly recalls the impact of a previous 25% import tariff imposed by the Trump administration during an 18-month period related to an airline dispute. He states that Burgundy wine exports to the US saw a dramatic “drop of about 50%”, effectively bringing the market “almost stopped” during that time.
Regarding the current 10% tariff, Labet predicts that French producers and US merchants will likely attempt to split the cost to minimize the impact on sales and consumer prices. However, he warns that a return to the 20% tariff level would likely replicate the severe market disruption experienced previously.
A Broader Impact on French Exports
The concerns extend beyond Burgundy to the entire French wine and spirits industry. Jerome Bauer, president of the French National Wines and Spirits Confederation, highlights the significant financial toll of past tariffs, noting that the previous 25% tariff led to a loss of about $600 million (£450 million) for the industry “very quickly.”
He underscores that the current threat is even greater than the previous one because it includes categories like Champagne and wines stronger than 14% alcohol, which were previously excluded from the tariffs. The French industry’s proposed solution is clear: free trade with no tariffs, a stance bolstered by the fact that France and Europe maintain a significant trade surplus with the US in wines and spirits.
US Winemakers Also Feel the Pain
Perhaps surprisingly, opposition to the tariffs is also strong within the United States’ own wine industry. Rex Stoltz, vice-president of industry relations at Napa Valley Vintners, representing 540 wineries in California’s renowned Napa Valley, describes the situation as “horrible.”
He explains that wine production is inherently international. Even US wineries rely on imported components like corks from Portugal and crucial oak barrels from France. These supplies, already expensive, could become even pricier due to tariffs, increasing costs for American producers.
Furthermore, trade disputes trigger reciprocal actions. Stoltz points to the devastating impact on US wine exports to Canada, which is the most important export market for California wines and a top market for Napa Valley. As a result of retaliatory measures or boycotts, Canadian stores have reportedly removed all American alcohol beverage products from their shelves, meaning there are currently “zero Napa Valley wines on the shelves of stores in Canada.”
US winemakers, like their French counterparts, express a simple desire: “We just want to compete on an even playing field with our friends and neighbours all over the world.”
In conclusion, the specter of renewed or increased US tariffs casts a dark shadow over the global wine trade. From the cellars of Burgundy to the vineyards of Napa Valley, producers on both sides of the Atlantic agree that these protectionist measures are not only damaging to centuries-old export markets but also harm domestic industries through increased costs and retaliatory trade barriers. The hope shared across continents is for a return to stable, tariff-free trade that allows winemakers to focus on their craft rather than navigate unpredictable political headwinds.
References
- https://www.bbc.com/news/articles/ckgr5kgxr8eo
- https://www.bbc.co.uk/news/articles/ckgr5kgxr8eo
