As Europe faces the prospect of a ruinous trade war with America, Frédéric Zeimett can consider himself fortunate.
With the rest of the EU’s exporters, from car makers to pharmaceutical companies, France’s wine growers will from Wednesday face a blanket 20 per cent tariff on products they send to their biggest foreign market.
Zeimett, who runs Maison Leclerc Briant, one of the smaller champagne houses, has been thrown a lifeline, however. Fearing the worst after Donald Trump was elected last November, his New York-based importer ordered a 40ft container carrying 15,000 bottles of his wine, which has long since been shipped to a warehouse in New Jersey.
“That importer acts quickly. That’s the equivalent of our annual sales in the US or 10 per cent of our production,” said Zeimett, whose company is based — alongside the likes of Moët & Chandon, Pol Roger and Perrier Jouet — in the picturesque town of Épernay, in the heart of champagne country, east of Paris.
Many of the bigger houses are thought to have taken similar pre-emptive action. “It’s been estimated that two to three million bottles crossed the Atlantic in the last months of the year,” Zeimett added, declining to name names. “But that doesn’t mean I don’t feel for those who didn’t have the luck or the foresight to send stocks to the US ahead of time.”
The European Commission is yet to formulate its response to Trump’s “liberation day” attack, which could hit an estimated €380 billion (£323 billion) of exports from the EU’s 27 members and shave 0.2 to 0.5 percentage points off growth this year.
Ursula von der Leyen, the European Commission president, has vowed to take “countermeasures’. These will be in addition to a retaliatory package, drawn up by Brussels and expected to be voted through this week, on €26 billion of American exports. It is being imposed in response to an earlier wave of US tariffs on steel and aluminium that were toughened and extended in February.
Trump is a long-standing foe of the EU, which he has accused of treating America “absolutely horribly”. He has justified hitting Europeans with a rate double the 10 per cent faced by Britain by the fact that last year they sold €198.2 billion more goods to America than they bought from it.
What he fails to mention is that more than half of this was offset by a €109 billion US surplus on services, many of which are provided by tech companies such as Microsoft, Google, Meta and Amazon.
Von der Leyen, facing one of the greatest challenges of her six years in Brussels, has had her task complicated by the 27 member states’ differing economic and political relationships with America.
Some European business leaders also fear retaliation could merely provoke Trump into raising tariffs even higher and would prefer to see the EU adopt Britain’s “softly softly” approach.
President Macron, who has denounced the levies as “brutal and unfounded”, has been among those pushing Brussels to take a tough line. “All the instruments are on the table,” the French president told a meeting of industry leaders in the Elysée Palace.
He also urged European companies who hope to mitigate the effect of the tariffs by investing and producing more within America to put their plans on hold.
“We are appealing to patriotism,” said Éric Lombard, the finance and economy minister. “If a large French company agrees to open a factory in the United States, it would give the Americans a point [in their favour].”
Such calls have received a cool response from some French industrialists. Pernod Ricard, the drinks group, looks set to continue with a €240 million project expanding its operations in Kentucky, while Dior is about to open boutiques in New York and Beverly Hills.
After talks with Sir Keir Starmer on Saturday, Macron said that he and the prime minister had reaffirmed their “determination to closely coordinate our positions in the ongoing discussions with President Trump”.
He added: “A trade war is in no one’s interest. We must stand united and resolute to protect our citizens and our businesses.”
Macron’s anger is understandable: despite the success of French exports to America of everything from wine and spirits to nuclear reactors and pharmaceutical products, the two countries’ trade in goods is roughly in balance. This, however, has not saved it from the 20 per cent tariff that has been imposed on the entire EU, with the exception — for now, at least — of certain goods such as pharmaceuticals. Its members sold €117 billion of them to America last year, making them its largest export.
By contrast, Germany’s surplus on goods with America hit a record €92.2 billion last year — helped by a record €24 billion of cars and other motor vehicles — while Italy’s was €38.8 billion, according to figures from Eurostat.
Despite its small economy, Ireland had a massive surplus, too, of €50.8 billion, thanks to its emphasis on high value exports of pharmaceuticals and technology. This was more than outweighed by a deficit with America on services, though, some of which were royalty payments directly linked to manufacturing. The pharmaceuticals exemption means the effective rate the country pays could anyway be closer to 5 per cent.
Germany is reportedly backing France in pushing von der Leyen to get tough with Trump. This could include the EU taking aim at Silicon Valley, in particular, with its so-called “anti-coercion instrument” — a measure dubbed its “trade bazooka”. Introduced in December 2023 with an eye to China, but never used, it gives Brussels the authority to take tough measures against what it deems coercive actions by other states.
There are also calls to target American banks and other financial institutions, which are also highly active in Europe.
Its use faces potential resistance from Giorgia Meloni, the conservative Italian leader, an ideological ally of Trump who has warned against the dangers of escalation. “I am not convinced that the best choice is to respond to tariffs with other tariffs,” she told Rai, the state broadcaster, last week. With Hungary, Romania and Greece sharing her wariness, this may give her the blocking minority to stop the bazooka being fired.
Either way, the European Commission looks certain to clamp down on other major exporters, such as China, which are expected to try to “dump” goods they can no longer sell in America in Europe after being hit even harder by Trump. Brussels already levies tariffs of up to 35 per cent on Chinese electric cars.
In the meantime, government ministers across the EU have been trying to calm their jittery exporters. Among them was Laurent Saint-Martin, France’s foreign trade minister, who travelled to Épernay on Friday.
As tourists — some of them Americans — enjoyed cellar tours and sipped glasses of brut in the spring sunshine in Perrier Jouet’s garden on the avenue de Champagne, Saint-Martin was meeting producers a few doors away in the ornate 19th-century town hall.
“I came to offer them my full support to assure them that the government is at their side and will not abandon them,” he declared.
Many at the meeting were wary of retaliation, fearing their sector’s high profile makes them an appealing target for Trump. They still remember 2019, when his first administration hit champagne exports with a 25 per cent tariff as part of an unrelated dispute between Boeing and Airbus over subsidies.
Manuel Reman, the head of Krug, said afterwards he hoped that Europe “will be able to negotiate and, above all, not aggravate the phenomenon”.
Some producers such as Zeimett believe Europe should take a more “muscular response”, though he acknowledges it could be risky. “A week ago, the talk was of 200 per cent rather than 20 per cent tariffs,” he said. “It would be extremely challenging if the leading export market for a wine-producing region such as Champagne suddenly collapsed.”
