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US tariff threat on Champagne is unacceptable, says French wine body

It is 'deplorable' that the US has threatened tariffs on Champagne and other French sparkling wines by up to 100%, said one industry leader, who urged France's government to find a solution to a dispute over the country's digital services tax.

French officials and trade leaders have been quick to rebuke the announcement of potential US import tariffs on Champagne and other sparkling wines, as well as many types of cheese.

US trade officials warned they might introduce tariffs worth $2.4bn and ‘up to 100%’ on some products in retaliation for France’s digital services tax.

If implemented, they would come on top of $7.5bn of tariffs enacted on 18 October on a range of European goods, including French, Spanish, German and UK still wines, due to a dispute over aerospace subsidies.

‘We of course deplore this announcement,’ said Antoine Leccia, president of the French wine and spirit export body, FEVS.

‘After the dispute over Airbus, [this announcement] targets French wines again and always in the context of a dispute between France and the United States that does not concern our sector,’ he said.

He called on the French government to act urgently to resolve the dispute over the digital services tax.

The Comité Champagne trade body declined to comment on the matter.

Exports of French sparkling wine to the US were worth around €700m per year, FEVS said.

Many Champagne houses have looked to the US for sales growth in recent years, and particularly for higher priced prestige cuvée bottlings.

Comité Champagne data showed that 23.7m bottles were shipped to the US in 2018. That maintained the US as the largest export market for Champagne by value, worth around €577m.

‘A strong response’

France’s economy minister, Brune Le Maire, promised a ‘strong response’ from Europe if the new round of tariffs were implemented by the US.

A response would have to be coordinated with Brussels, however, because of the EU-wide customs union. Reuters quoted a European Commission spokesperson as saying there would be a ‘proportionate’ response if fresh tariffs were enforced.

Their comments came as French president Emmanuel Macron met his US counterpart, Donald Trump, at a NATO summit in London this week.

Both appeared careful to leave the door open to negotiations during a joint press conference, but they also reiterated their respective positions.

At FEVS, Leccia called on president Macron to find a solution.

‘For six weeks now, our companies have been harshly affected by the Airbus litigation,’ he said. ‘It is necessary to avoid creating new problems. A month remains for the French authorities to reach an agreement with the US on digital services.’

The Office of the US Trade Representative has invited public comments on its proposals, with a deadline for comments of 6 January 2020.

See also: US threatens to raise French wine tariffs up to 100%


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