Donald Trump's inauguration: Southern winegrowers on alert with the announced return of customs duties

The region's wines are selling well in the United States. Midi Libre – STEPHANE BARBIER

With the return of Donald Trump, the United States could once again impose customs duties on foreign products. The wine industry, in particular, is worried without falling into total pessimism.

The butterfly effect. The election of Donald Trump in November gave a boost to the activity of many winegrowers in the region. “There were more orders at the end of 2024 and during the first two weeks of January“, confirms Cyril Marès, president of the Costières de Nîmes winegrowers' union. “Some have even drawn on the stock intended for other markets, in order to speed up shipments to the United States before the fateful date”, confides an influential player in regional viticulture. A “Trump-eye” resurgence. Because as soon as he takes office in the White House, the 47th American president is expected to impose customs duties on foreign products, “from 10% to 20%“, as he hammered home during the campaign as a guarantor of radical protectionism.

Winegrowers have already suffered this in the past. In 2019, in response to a conflict between Boeing and Airbus – over European subsidies that the Americans considered illegal – Donald Trump obtained authorisation from the World Trade Organisation (WTO) to impose a 25% surcharge on French wines. In the Costières de Nîmes vineyards, this initially had a… positive effect. “Wines with more than 14 degrees were excluded from the taxes. But this then significantly slowed down our activity on the American market, which still represents around 10% of our exports”, rewinds the boss of Costières. The end of this Trump tax, in March 2021, allowed us to return to previous levels… “but it had not been cancelled, just suspended. We knew that it would come back to the forefront, with or without Trump”, adds Cyril Marès.

A market with high potential

The fear was shared across all the region's vineyards. Between 2019 and 2020, the 38 appellations and denominations grouped under the AOP Languedoc had suffered a drop in exports of more than 15%, from 72,856 to 61,824 hectoliters. “However, it was multifactorial, because there was certainly also a lockdown effect,” analyses Christophe Jammes, head of the economics and studies department of the Languedoc Wine Interprofessional Council (CIVL). At the national level, the wine industry had calculated a loss of €600 million in one year.

200% Deposit Bonus up to €3,000 180% First Deposit Bonus up to $20,000

Since then, this market has regained strength. Because even if they consume 75% of domestic wines, Americans remain, with 33.3 million hectoliters, the biggest consumers in the world. That is a significant potential. France thus exported, in 2023, 1.29 million hectoliters, “including 194,000 hectoliters for the Languedoc basin. And 71,000 of AOP Languedoc wines, one of the best years of the decade”, summarizes Christophe Jammes.

The years 2021 and 2022 had however been even better, up to 88,547 hectoliters exported for the AOP Languedoc. The slight drop in 2023 therefore reflects, according to Cyril Marès, “a market that has reached maturity and above all is more competitive. To sell a bottle, you have to make three times more effort than a few years ago”. So a new tax could have consequences.

“The end of the gentle trade”

“We're going to get into the hard stuff, the time of the gentle trade that Montesquieu theorized in the 18th century is over”, says ironically Laurent Thieule, president of the Picpoul de Pinet union, this white wine produced on the banks of the Thau lagoon.

For its wines, too, the other side of the Atlantic represents a significant market, “20% of our exports, or 1.2 million bottles“. And so far still promising. “The studies we have carried out have shown that our current sales reach 3.4 million Americans and that we have the potential for 3 million additional customers. On a US scale, we remain a niche market, but a niche in the making. So we are not going to give up, we are already studying targeted actions from the summer of 2025 on specific events“, he says, combatively. With a major question: how to finely pass on the tax on the price of the bottle ? “We will have to be fine on the analysis, but we know how to carry out this work. We have just done it for the British market which imposes a tax linked to Brexit on February 1st. We know, there, that there is a psychological threshold at 10 pounds sterling (a little more than €11, Editor's note). We also think that all wines will have to increase their prices, and that faced with a Chablis that will undergo a more significant increase, our Picpoul de Pinet, more affordable, will perhaps come out on top”, Laurent Thieule further analyses.

Another challenge

“This time, it should not be a 25% tax, we are talking more like 10%. The American economy is still dynamic, so the impact could be less significant”, hopes Cyril Marès. However, the president of Costières de Nîmes does not hide the fact that it will still be necessary to “make a lot of effort. We have suffered so many hard blows in recent years, climatic, commercial, political, that we have become accustomed to adapting“, he says. However, he and his peers could have done without this butterfly effect.

I subscribe to read the rest