Yay, trade war!
After nearly two years of often antagonistic diplomacy, President Trump took to Twitter today to attack France in one of the more clichéd ways possible: going after its wine. Seeing as Trump is open about his teetotaling, you’d think he’d have picked this target sooner.
The United States and France are current having a bit of a tiff, more so than usual. It’s not quite at a “freedom fries” level of acrimony, but it’s getting close. The whole thing started when Trump used the past 22 months to undermine our alliances with France and other European countries. French President Emmanuel Macron then escalated things last week by suggesting that the EU may want to consider putting together a “true European army” just in case Trump ever decided to follow through on his threats to pull out of NATO. (Stupid French, wanting to defend themselves against foreign attacks.)
Despite having what was billed as a relatively friendly meeting over the weekend, Trump got back to basics today by firing off a number of tweets taking shots at Macron and France. The second of four tweets specifically took aim at French wine. “On Trade, France makes excellent wine, but so does the U.S.,” he wrote. “The problem is that France makes it very hard for the U.S. to sell its wines into France, and charges big Tariffs, whereas the U.S. makes it easy for French wines, and charges very small Tariffs. Not fair, must change!”
Since we’re talking about Trump and Twitter, some fact checking is required. According to Eater, “As the Trump tweet correctly suggests, America does have an uneven relationship with France where wine importing and exporting is concerned. The United States is currently the biggest export market for French wine, while American bottles are not as popular in France, or across Europe in general. America pulls in about a third of all European Union wine exports—roughly $25 billion worth of product per year—according to a report by Bloomberg. Meanwhile, American wine makes up only about 16 percent of all EU imports. The EU tariffs on U.S. wine run between $0.11 to $0.29 per bottle, while the U.S. charges $0.05 and $0.14, Axios reports.”
A few important points are glossed over here, though. First, a 15 cents per bottle tariff probably isn’t dooming American wine in France. Instead, larger economic issues are at play here: American wine simply can’t compete on price in Europe in general. The French get plenty of extremely high quality wines right on their own continent at a reasonable price. Comparatively, U.S. wineries have much larger shipping costs to contend with, and many American wines are simply more expensive than their foreign counterparts to start. Yes, tariff inequality doesn’t help the situation, but that’s only part of the equation. Not to mention the fact that America has a long-standing appreciation of French wine whereas the French don’t have similar cultural feelings about American wine.
In the end, probably the only way to balance out the trade of American wine and French wine with tariffs would be to raise tariffs on French wine to the point where many Americans couldn’t afford it anymore. We’ll leave it up to you how you feel about that policy.