Burgundy Winemakers Say French Aid Not Enough to Offset Trump Tariffs

Workers collect red grapes in a burgundy vineyard during the grape harvest season, in Volnay, central France. (AP Photo/Laurent Cipriani, File)

DIJON, France (AFP) — Burgundy winemakers in eastern France on Tuesday gave a thumbs down to the government’s package of financial relief for lost sales from the 25% tariff imposed by U.S. President Donald Trump. 

The U.S. leader imposed the penalty last October after Washington won a long-running battle at the World Trade Organization over state subsidies to European planemaker Airbus.

The move took a heavy toll, with U.S. imports of French wine dropping nearly half almost immediately, and Burgundy producers were especially hard hit.

“We’re not happy,” said Thiebault Huber, president of the federation of official Burgundy appellations.

Late Monday, Finance Minister Bruno Le Maire announced that payroll taxes and other business charges would be waived for French winemakers hit by lost sales to the huge American market.

The government will also let producers distill up to 1.7 million barrels of their excess stock into ethanol — which can be used to make sanitizing hand gel during the coronavirus crisis.

The government will buy the ethanol at a guaranteed price, for a total of $152 million.

But unlike many other winemakers in France, Burgundy houses generally have little trouble selling as much of their prized whites and reds as they can make. 

They also have some of the biggest overseas sales — more than have of all Burgundy wine (56%) is exported, and the U.S. is the biggest buyer, with 20% of the total.

“We’re not interested in distillation,” said Huber, adding that he was “furious.”

Louis-Fabrice Latour, head of the BIVB growers’ association, agreed. 

“We don’t have any excess production in Burgundy. We only have two years’ worth of stocks, so we don’t distill.”

“What we want is help for our exports,” he said, adding that Burgundy sales outside France had fallen 8.7% by value in the first quarter.

Trump targeted French along with British, German and Spanish wines with the tariff, and his administration has since threatened whopping 100% tariffs on all European wine imports.

French wine associations last week had urged the government to unblock 500 million euros in aid, including a bigger emergency distillation plan for up to 79 million gallons.

They have also denounced the apparent lack of progress on an EU compensation package of 250 million euros to help offset the Trump tariffs.

“We’re putting billions of euros into Air France or Airbus, but we’re not helping a sector in peril,” Huber said.

© Agence France-Presse

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