A 200% tariff on French cognac would shock the industry, economist says

Record ID: 1987706

  • Title: A 200% tariff on French cognac would shock the industry, economist says
  • Date: 2nd April 2025
  • Summary: JERUSALEM (APRIL 2, 2025) (REUTERS) NOTES BEING REMOVED FROM THE CREVICES OF THE WESTERN WALL VARIOUS OF NOTES BEING REMOVED FROM WESTERN WALL / NOTES ON GROUND RABBI OF THE WESTERN WALL AND HOLY SITES, SHMUEL RABINOVITCH VARIOUS OF WORKERS PUTTING REMOVED NOTES FROM THE WALL IN PLASTIC BAGS (SOUNDBITE) (English) GUIDE AT THE WESTERN WALL HERITAGE CENTER, ASHER ROKACH, SAY
  • Embargoed:
  • Keywords: Cognac Trump tariffs alcohol trade vineyards
  • Location: VARIOUS LOCATIONS
  • City: VARIOUS LOCATIONS
  • Country: France
  • Topics: Europe,Budget/Taxation/Revenue,Government/Politics
  • Reuters ID: LVA002354302042025RP1
  • Aspect Ratio: 16:9
  • Story Text: France's cognac sector could face a shock if U.S. President Donald Trump makes good on his threat to slap up to 200% tariffs on European wine and spirts, an economist said on Wednesday as the world awaits the announcements.
    Trump’s tariff announcements are expected later on Wednesday (April 2).
    Trump has made numerous tariff threats since returning to office on Jan. 20, ranging from a universal duty on imports to targeted tariffs on specific sectors or countries, in a bid to get others to meet his policy demands.
    On March 13, Trump threatened to slap a 200% tariff on European wine and spirits in response to the EU plan to impose tariffs on American whiskey and other products next month.
    French economics professor Bernard Blancheton, from Bordeaux University, said the cognac industry is highly dependent on the American market, exporting 50% of its production to the U.S.
    Brands such as Hennessy enjoy huge popularity among American consumers, dating back to the early 20th century, especially after World War II when American G.I.s who fought in France discovered a taste for the French spirit, Blancheton said.
    Cognac shipments to China have already plunged since temporary tariffs were imposed in October, with a 72% drop in February, according to the cognac industry body.
    Beijing's decision to delay any definitive penalties precedes Trump expected announcement later on Wednesday to levy taxes on all countries that trade with the United States.
    In October last year, Beijing imposed temporary measures on EU brandy, hitting French brands including Hennessy and Remy Martin, even as the investigation continues, after France supported EU tariffs on China-made electric vehicles.
    For now, the Chinese measures require China's importers to pay security deposits of nearly 40% if they wish to import brandy from the bloc, making it more costly upfront to ship brandy from the EU.
    Unlike in China, where Blancheton believes importers of cognac can absorb such temporary security deposits, the U.S. market could just be wiped out if Trump pushes through with 200% duties on EU spirits.
    He said that neither the French government nor the European Union may not have the power to negotiate with Trump - who has been critical of Europe. Rather, LVMH CEO Bernard Arnault, might be the best person to reason with Trump. The conglomerate owns Hennessy, which is exported to the U.S.
    (Production: Stephane Mahe, Michaela Cabrera)
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