Trump's tariffs on European goods hit France's cognac industry hard, leading to uncertainty and financial challenges.

From Yahoo Finance: 2025-04-05 01:02:00

The $3 billion cognac industry in France faces further hardship as U.S. President Trump imposes 20% tariffs on all European goods. Cognac sales to China have already dropped by over half due to Beijing’s retaliatory tariffs. The U.S., the largest cognac consumer, accounts for half of all sales, leaving growers anxious.

Christophe Fillioux, owner of the Jean Fillioux cognac house, is uprooting vineyards in response to the crisis. Trump’s threat of 200% tariffs on European wine and spirits adds to the uncertainty. Cognac exports to the U.S. were worth 1 billion euros last year, with the market also being France’s top destination for wine sales.

The global slowdown, exacerbated by trade tensions, has caused a decline in cognac sales over the past two years. Production expansion during the pandemic has left many growers in debt. Industry figures are working with banks to navigate the crisis, with uncertainties looming over the future of the sector.

France’s cognac industry, heavily reliant on international trade, faces a complicated downturn. From the 17th century, cognac has been destined for foreign markets, with exports accounting for 97% of production. The economic environment has led to reduced production limits, impacting the region’s economy and employment prospects.

Cognac’s “special bond” with the U.S. Black community may be at risk as sales falter due to price hikes and changing consumer preferences. With the threat of tariffs looming, industry players may struggle to maintain market share. Some growers, like Pascale Dupuy, are already feeling the impact with reduced contracts from major cognac houses.



Read more at Yahoo Finance: France’s cognac makers, buffeted by trade wars, reel from Trump’s tariffs