On Saturday morning Dixon Brooke, a wine merchant in Berkeley, California, will put up tents in his parking lot and fire up some charcoal grills for a party to celebrate the annual arrival of the Beaujolais Nouveau from France.
The event to honour the vin primeur — harvested the same year it is sold to the public — has become a tradition for Mr Brooke. But this year it will come with a bitter aftertaste.
Under 25 per cent tariffs placed on French wines by the Trump administration in mid-October, Mr Brooke’s business, known as Kermit Lynch, is facing a large and unexpected bill on the 24,000 bottles of Domaine Dupeuble that landed from France last week.
He decided to soak up all the cost along with his national distributor instead of passing it on to consumers, or demanding a lower price from the margin-squeezed producers across the Atlantic.
“We started planning before the tax was announced, we had committed to the quantity, and we made the decision to go forward,” Mr Brooke said. “We’ve worked hard to make sure our customers don’t notice on this year’s incarnation.”
French wines are only a fraction of the $7.5bn of goods targeted by the levies Donald Trump imposed on a wide range of EU products in retaliation for subsidies to Airbus, the pan-European aircraft manufacturer, which were judged to be illegal by the World Trade Organization. Other products include Spanish olive oil, Italian cheese, German pork products and British suits.
Mr Trump has had a curious fascination with punishing France through the wine sector during his presidency, turning it into a symbol of the strains in transatlantic trade relations.
“I’ve always liked American wines better than French wines, even though I don’t drink wine. I just like the way they look,” Mr Trump told reporters in the Oval Office in July as he complained that Emmanuel Macron, France’s president, had pushed through a tax on digital services that would hit US technology companies.
French winegrowers have reacted with shock and irritation to the levies imposed on their shipments since October 18, though producers of sparkling wine such as champagne, and any wine with an alcohol content above 14 per cent, are not on the list.
“Donald [Trump], talk to me! It’s completely bonkers,” said Irène Tolleret, a winegrower and member of the European Parliament from Mr Macron’s party.
“The American market was growing at full tilt,” she said. “This decision could be catastrophic, but my message is, ‘We will survive!’ . . . For the good of the planet we need pecorino, we need French wine.”
Last year almost 12m bottles of Beaujolais Nouveau — more than half the total production of 22m — were exported. The top markets were Japan, the US and Canada, followed by the UK and Switzerland. The wine will be released for consumption on Thursday.
Dominique Piron, president of the Inter-Beaujolais producers’ association, said that application of the tariffs — which he called the “Trump law” — could in theory trigger an increase in the retail price of more 40 per cent once it had worked its way through the value chain.
Some buyers and sellers had agreed to share the costs by cutting their margins for this year’s Beaujolais Nouveau, for which prices and publicity materials have already been decided and printed.
“It’s much more serious for the longer term,” Mr Piron said.
In Brussels and Washington, there are few signs that the Airbus dispute will be resolved any time soon. Although officials on both sides have said they are willing to negotiate a settlement, it is unlikely to happen before the WTO issues a final ruling on US subsidies to Boeing, which could result in EU tariffs on American goods next year, further exacerbating tensions.
Some relief for French wine might come if the Trump administration decides to rotate the products it is targeting — Italian wines, for now, are spared — but there are no signs of any imminent switch. One of the consequences is that French producers are considering how to diversify their exports away from excessive dependence on the US market.
Ms Tolleret wants the EU to be flexible about the allocation of its agriculture funds — some of which are used for the promotion of wine exports — to allow money to be diverted to new markets and different wines from those originally targeted, in order to compensate for the damaging impact of the US tariffs.
“I am working for flexibility so that companies can react as quickly as possible,” she said.
For now the pain is concentrated in the Beaujolais supply chain because it had to be shipped and sold within short order. Few will have received their wines to America before October 18. But over time the pain will spread much more broadly.
“Everybody will have to raise prices, and you can’t charge more without having a negative impact,” says Rob Hurley, an importer of French wines — including Bordeaux and Côtes du Rhône, but not Beaujolais — in the Boston suburbs. “We have two shipments arriving this month and the tax bill is staggering. It’s amazingly painful.”
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