France’s cognac makers, buffeted by trade wars, reel from Trump’s tariffs

COGNAC, France – Christophe Fillioux’s family estate in the cognac region of southwest France has survived for five generations, through wars and financial crises. Now, though, he has started to tear up some of his vineyards by the roots.

U.S. President Donald Trump’s decision this week to slap 20% tariffs on all European goods is deepening the pain for France’s nearly $3 billion cognac industry, which was already being buffeted by global trade tensions.

In October, the region’s 4,000 growers were targeted by Beijing with tariffs following the European Union’s levies on Chinese-made electric vehicles. Since then, cognac sales to China, its second-largest market by volume, have plunged by more than half.

With the U.S. – the world’s top cognac consumer – accounting for one out of every two bottles sold, Trump’s tariffs have left many growers apprehensive.

Fillioux, the 45-year-old owner and master blender of the Jean Fillioux cognac house, founded in 1894 by his great-great-great grandfather, had already torn out half a hectare of old vineyards. He plans to uproot another hectare-and-a-half next year as part of an industry-wide plan to help growers through the crisis.

“The situation is very hard to navigate. We’ve got a huge visibility problem,” Fillioux said, standing in a vineyard planted by his father in 1980 – the year he was born.

Worse may be to come. Trump has threatened 200% tariffs on European wine and spirits if Europe hits US bourbon with additional duties.

Source: Globalbankingandfinance