U.S. and E.U. Reach Trade Agreement: What It Means for Wine and Spirits

While the U.S. and European Union reached a trade agreement that includes a 15 percent tariff on most E.U. products imported into the U.S., the specific rates for alcoholic beverages remain undecided. The ongoing negotiations have left producers, importers, and consumers optimistic about potential exemptions for wine and spirits as part of a "zero-for-zero" tariff system.

Ben Aneff, President of the U.S. Wine Trade Alliance, indicated that the most drastic outcome—a potential 30 to 50 percent tariff on E.U. wine—seems to have been averted. European Commission President Ursula von der Leyen acknowledged that discussions about the tariff rates on alcoholic beverages are still in progress, leaving uncertainties about exemptions for wines already in transit and the enforcement of tariffs if negotiations extend beyond August 1.

Chris Swonger, head of the Distilled Spirits Council of the U.S. (DISCUS), expressed hope that the positive developments in trade discussions would reinstate zero tariffs for E.U. and U.S. spirits. This policy, he believes, would benefit not just distillers but all those involved in the industry.

However, if wine and spirits do not receive exemptions, the 15 percent tariffs will adversely impact businesses on both sides, particularly U.S. importers and distributors, thereby increasing consumer prices. Lamberto Frescobaldi, president of Italy’s Unione Italiana Vini, stated that the projected impact of such tariffs could result in a €317 million loss for the Italian wine sector over the next year, with U.S. importers facing an estimated $1.7 billion in missed earnings.

Frescobaldi further explained that a typical €5 bottle of Italian wine could end up costing approximately $15 in the U.S. market due to the new tariffs, causing the markup from winery to shelf to rise significantly—from 123 percent to 186 percent.

For more updates on tariffs and trade, check out Shanken News Daily.

About the Author: Chris Lehoux

Meet Chris Lehoux, an experienced wine connoisseur and dedicated blogger with a deep passion for all things wine-related. With years of expertise in the industry, Chris shares insightful wine reviews, valuable wine tasting tips, expert pairing advice, and captivating tales of vineyard visits. Join Chris on a journey through the world of wine, where every sip is an adventure waiting to be savored!