'When we hear about the Trump tariff announcement, we shake', EU wine industry lobbyist says

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00:00President Trump is threatening to slap 200% tariffs on alcohol from the European Union.

00:05It's in response to the bloc's placing a flat duty of 50% on US whiskey.

00:11That move itself in retaliation to steal an aluminium tariff from Washington.

00:16While the tit for tat is further escalating tensions between the two sides

00:19who have been long time trading partners.

00:22Luke Schrager has more.

00:24The transatlantic trade spat escalates again and this time it's alcohol in the firing line.

00:30The European Union has just put a nasty 50% tariff on whiskey.

00:34If this tariff is not removed immediately, the US will shortly place a 200% tariff on all wines,

00:41champagnes and alcoholic products coming out of France and other EU represented countries.

00:47That 50% import duty is itself a response to Donald Trump's own tariffs on steel and aluminium.

00:53The European Union stated on Wednesday it would allow levies on 26 billion euros worth of US

00:59products, previously suspended, to come in on April 1st.

01:03Despite the mounting trade war, Brussels has left the door open to negotiation.

01:07We are prepared for whatever might come and we have been preparing for over a year.

01:12For over a year.

01:13We want to be very, very clear on this, that the EU is not part of the problem here

01:19and the suggestion that we are part of the problem is deeply misguided.

01:26We believe that we should be working with the US to be part of the solution.

01:31EU wine exports to the United States were worth nearly 5 billion euros last year,

01:37according to statistics agency Eurostat.

01:39Nearly a third of its total wine exports globally, with France and Italy making up the majority.

01:45The sector saw a major slowdown last time Donald Trump was in office,

01:49with far less extreme tariffs in place.

01:52Elsewhere, though, on another front of the trade war,

01:55Canadians have come up with their own solution when it comes to alcohol,

02:00simply boycotting American spirits, among other products.

02:03But in the meantime, Europe's alcohol industry faces an uncertain future.

02:10Let's bring in Dr Ignacio Sanchez Ricarte now.

02:13He's the Secretary General of CIV.

02:15It's the largest European wine industry lobby.

02:18Great to have you on the programme, Ignacio.

02:20Thank you so much for joining us.

02:22First of all, I'd just love to get your reaction to this threat of 200% tariffs on alcohol

02:27from the European Union that Washington is now threatening to put in place.

02:32So, thank you very much and thank you for the invitation.

02:36When we heard about Donald Trump announcement, we shake because 200% tariffs on EU wines means

02:45the fact that the US market will be closed to our wines.

02:50There is no way that EU wines will be able to reach the market with such a huge tariff imposed to us.

02:59And just speak to us more about this impact this move could have.

03:04Have you been speaking to business owners, for example?

03:07Just talk to us about the impact.

03:10So, you need to imagine that 27% of our exports globally go to the United States

03:18and our best wines reach the markets.

03:20I mean, US winemakers, US wine consumers love our wines and they have a very good tasting.

03:27So, from one day to the other, we will be stopping shipping our wines there

03:32because there is no way we can sell them without 200%.

03:36Immediately, there will be a €5 billion stop, impact.

03:42And then we need to think about the intermediate impact on wine companies

03:47because we have to produce the wines.

03:49We have the vines, we have the grapes, we continue the harvest,

03:53but we don't have a place to put our wines.

03:55We don't have an alternative market.

03:57So, it will be a hard, hard hit on the long-term economic sustainability of our wine companies.

04:04And what is Steve likely to do now?

04:06What's next for you?

04:07How are you going to try to cushion this blow if Trump does follow through on his threat?

04:14So, happily for years, I mean, more than a decade,

04:17we have an extremely good relation with the US wine industry.

04:21And we have agreed to maintain what we call a wine for wine approach,

04:25which is keep, please, wine outside of any retaliation list,

04:30outside of any unrelated trade dispute.

04:33So, what we are begging, we are asking the European Commission

04:38and our colleagues will have to ask the US administration is

04:42resolve the problem of steel and aluminum,

04:44but please do it without including wines in the retaliatory list.

04:51For example, the European Commission is now opening a public consultation,

04:57a stakeholder consultation on the list of products to be impacted by EU countermeasures.

05:04We have already said it, black and white,

05:06we don't want our US wine colleagues to be impacted by these measures.

05:11We won't be out of any kind of retaliation.

05:15And do you believe that the EU will listen to your calls?

05:17Do you think that they'll stop here?

05:19Do you think that they will continue to issue tariffs in retaliation to Trump's threats?

05:26It is difficult because when we discussed with the Commission,

05:29the Commission said we didn't start this.

05:31So, it should be the US administration to stop hitting EU companies.

05:38I remain relatively optimistic that the period that the Commission is proposing

05:45to the Trump administration to negotiate these disputes,

05:50so these 15 days between now and the entry into force of the first set of tariffs,

05:57or one month before the new EU tariffs will be implemented.

06:03I really hope and remain a little bit optimistic

06:06that the two administrations will reach a medium agreement

06:11so that we are not that much impacted.

06:14We'll have to see how it all plays out.

06:16Ignacio, good luck. We hope everything works out.

06:19Thank you so much for joining us on the programme.

06:21It's great to have your insight there.

06:23Thank you very much.

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