In MARTILLAC, France, on March 14 (Reuters) - The owner of one of France's prestigious Bordeaux wine chateaux is concerned about the potential impact of U.S. President Donald Trump's threat to impose 200% tariffs on European wines. Trump's ultimatum is linked to the EU's proposed tax on American whiskey.
Florence Cathiard, the proprietor of Chateau Smith Haut Laffite in southwestern France, hopes that Trump's tariff threat is a mere negotiation tactic rather than a concrete action. Describing it as a possible tactic from Trump's book "The Art of the Deal," Cathiard emphasized the potential devastation such tariffs could have on her business, which employs 60 individuals and operates on 80 hectares in Martillac.
With the United States being a significant market for Chateau Smith Haut Laffite, accounting for over 20% of their wine sales, Cathiard expressed concerns about the potential three-fold increase in retail prices if tariffs were imposed. She also highlighted the challenges faced by the French wine industry due to previous market closures and intense competition.
Cathiard mentioned the hope placed on French luxury goods magnate Bernard Arnault, who has ties to both Trump and the wine industry, for potential intervention to navigate the situation and possibly mitigate the impact of the proposed tariffs.
EU wine exports to the U.S. totaled 4.9 billion euros last year, representing 29% of the EU's overall wine exports. France and Italy were the main contributors, making up nearly 90% of EU wine exports to the U.S.
Cathiard concluded by stressing the significance of the situation, noting that if Trump follows through with the tariffs, it could have severe consequences for the French wine industry.