There is increasing concern among French wine-makers about the threats by United States president Donald Trump of imposing import tariffs on French wine in retaliation to the tax on global technology giants imposed recently by the French government of Emmanuel Macron.
In case such a tariff is indeed imposed by Trump, it could adversely impact the livelihoods and jobs of small producers.
The new tax on large technology companies imposed by France is aimed at companies like Google, Amazon, Facebook and Apple who have been taxed on the revenues that the company generates from the country. While many see this as a fair tax on these large companies, a tariff on French wine would be more symbolic. But according to Trump, the tax on the tech companies by France is a targeted attack on such American companies and that is why he is obliged to retaliate. However, France has clarified that the tax is aimed at all large tech companies and not aimed specifically on American companies.
While attacking Macron over nationalism and world wars, Trump began tweeting furiously about French wine last November.
And Trump ramped up his rhetoric against French wine and threats of tariff last month and even tweeted that he would soon be announcing a “substantial reciprocal action” on what he called Macron’s “foolishness” over the technology tax. He added: “I’ve always said American wine is better than French wine!”
“France just put a digital tax on our great American technology companies. If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macron’s foolishness shortly. I’ve always said American wine is better than French wine!” Trump tweeted.
According to a report this month published in Bloomberg, informal proposals of implementing tariffs as high as 100 per cent on French wines was made by Trump at a business roundtable in the Hamptons.
Trump had told reporters earlier that he had “always liked American wines better than French wines even though I don’t drink”. He explained why: “I just like the way they look.”
The US accounts for about 18 per cent of the total French wine exports and was worth €1.7bn (£1.5bn) annually on the average and it has grown by almost one third in the last five years. Apart from the financial aspect of it – wine is the second-biggest export after aerospace, wine is also a crucial part of France’s identity.
But the smaller French wine producers, who are expected to be the worst hit in the case of a tariff by the US, are now hoping that the tussle between the two countries could be at least partially resolved at the G7 summit in Biarritz. While they are already worried about how to export to the United Kingdom after Brexit, the wine producers are also reminded of olive farmers in Andalucía, Spain were hit by tariffs by Trump on olives of the country.
“Clearly we’re concerned all across France. The US is our first market in terms of value, and the UK, which is our second, is also facing uncertainty over Brexit,” said Thomas Montagne, head of the European Confederation of Independent Winegrowers, is a producer in the Luberon, southern France.
(Adapted from TheGuardian.com)