French winemakers jittery over tariffs

Paris, Aug. 23: French winegrowers are on tenterhooks as they wait to see whether Donald Trump will follow through with his repeated threats to raise tariffs on French wine in retaliation for the new GAFA tax.

As the leaders of the world's richest countries gather for the G7 opening Saturday, winegrowers in host nation France fear they will have to suffer consequences from the new French tax on the US tech giants. Representatives of the GAFA corporations — Google, Apple, Facebook and Amazon — on Monday railed against the tax aimed at plugging a loophole that allows the firms to pay next to nothing in countries where they make huge profits. They called the tax “discriminatory” and a “troubling precedent”.

Meanwhile, while

■ TRUMP though a teetotaller, had tweeted in late July that "American wine is better than French wine!"

■ IMPORTED WINE faces US duties of 5.3 cents to 12.7 cents a bottle, while US wines shipped to the EU face duties of 11 to 29 cents a bottle

President Trump has repeatedly warned of retaliation, on August 9 suggesting a 100 per cent tax on French wine imports to the United States, according to the Bloomberg news agency.

Trump, though a teetotaller, had tweeted in late July that “American wine is better than French wine!”

While putting on a brave face, the French wine sector

-- the world's top exporter in terms of value and third in volume -- is making contingency plans.

Will Americans -- who bought USD1.8 billion worth of French wines and spirits last year -- be willing to pay double for their favourite Cotes du Rhone? ”We have to take the American president's threats seriously,” said Jerome Despey, the head of the wine industry section of France's leading agricultural union FNSEA.

“Wine cannot be held hostage in an international trade negotiation.”

Even before the French parliament approved the GAFA tax on July 11, Trump had hinted on numerous occasions that he could impose customs duties on French wine.

But at the time the rationale was one of unfair competition with American wines. “France charges us a lot for the wine and yet we charge them little,” the US president told CNBC in June, adding: “And you know what, it's not fair. We'll do something about it.” Imported wine currently faces US duties of 5.3 cents to 12.7 cents (5 to 12 euro centimes) a bottle, while US wines shipped to the EU face duties of 11 to 29 cents a bottle, according to trade bodies.