Huge Tariffs on French Wine May Be Avoided After G7 Talks
France’s Finance Minister says 'the threat has receded.'
The annual G7 summit wrapped up yesterday, and though it would have been nice to snuff out the Amazon rainforest fires, take decisive action on climate change, or reach a consensus on Iran, in the end, as The Guardian put it, "Not much was achieved." In fact, if anything was achieved, it was likely more confusion, especially on an important issue in the world of food and wine: Tariffs, and specifically U.S. tariffs on China. President Trump's thought process on whether to impose new tariffs on China has vacillated so rapidly over the past several days that he's sent the markets through a couple of whiplashes, even leaving world leaders seemingly scratching their heads. But while Wall Street might be stuck trying to parse Trump's words, worry over another much-discussed tariff may have been abated during the G7 talks: A potential French wine tariff.
Recently, Trump has been floating the idea of hitting French wines with taxes as high as 100 percent in retaliation to France's plan to tax the earnings of American tech companies. Even if you're the kind of person who quietly wonders "what is a tariff?" a 100 percent increase is easy to understand: doubling the price importers would pay to bring French wine from the European Union into the United States.
Though that wouldn't necessarily double the cost passed on to consumers, it would be a significant increase in price — and French wines already aren't cheap. For instance, in Food & Wine's October issue, our own Ray Isle lays out "The French 50" — or 50 French wines that work as a "crash course" for tasting your way through French wine regions. His "value buyer" section suggests eight inexpensive options, with prices ranging between $12 and $20. So for instance, if the cost of these wines was doubled at import, it's certainly likely that Isle's $15 2016 Cuvee Jean Philippe Cremant de Limoux Rose could suddenly cost $20 or more depending on how much of this increase importers and retailers believed they needed to pass on to consumers.
But despite our inability to read Trump's mercurial mind, the French, at least, walked away from the G7 thinking the debate over French wine tariffs is more or less settled. According to Reuters, France's Finance Minister Bruno Le Maire and U.S. officials used the sidelines of the summit as an opportunity to work towards a compromise — and hopefully a deal will be in place in the very near future. "Before [the G7 summit at] Biarritz, the threat was real, we were close to getting hit with a tariff on French wine ... After Biarritz the threat has receded," Le Maire reportedly told French TV station LCI. "It hasn't been totally lifted but it is receding and it's going to depend on the work we get done with my American counterpart in the coming days."
Meanwhile, Trump has apparently remained mum on the issue — unless, you know, he's composing a Tweeting about it right now.