In a decisive move to shield its wine and spirits industry from escalating transatlantic trade disputes, the European Commission has sanctioned a €5 billion French reinsurance initiative aimed at facilitating exports to the United States. This temporary scheme, effective from May 8 to July 8, 2025, is designed to expedite shipments ahead of potential new U.S. tariffs, providing short-term guarantees to companies against commercial and political risks.

The approval coincides with a critical juncture in EU-U.S. trade relations. Former U.S. President Donald Trump has threatened to impose a 200% tariff on European alcoholic imports unless the EU retracts its 50% tariff on American whiskey . In response, the European Commission has proposed countermeasures targeting up to €95 billion in U.S. imports, including American wine and spirits, should negotiations falter.

The reinsurance scheme aims to mitigate the risks for French exporters during this volatile period, enabling them to accelerate shipments to the U.S., which remains France’s largest export market for wine and spirits.

The French wine and spirits industry has faced significant challenges in recent years. In 2024, exports declined by 4% to €15.6 billion, with a notable 8% drop in Champagne sales . The U.S. market, however, showed resilience, with exports increasing by 5% to €3.8 billion.

Despite this uptick, the sector remains vulnerable to trade policy shifts. The proposed U.S. tariffs could severely impact French exporters, particularly those dealing in premium products like Cognac, which has already seen a 21.1% decline in global export volumes.

Industry stakeholders have expressed concern over being caught in the crossfire of geopolitical disputes. Pauline Bastidon, director of Trade & Economic Affairs at spiritsEUROPE, urged both the EU and U.S. to “stop using our sector as a bargaining chip in conflicts that have nothing to do with us”.

The reinsurance scheme is seen as a proactive measure to provide immediate relief to exporters. However, long-term solutions will require sustained diplomatic efforts to resolve underlying trade tensions and ensure the stability of the transatlantic wine and spirits trade.

At Vinho, we recognize the enduring value of France’s wine and spirits sector—not just as a cultural hallmark, but as a vital pillar of international trade and economic resilience. Despite rising geopolitical tensions and looming tariff threats, this industry continues to demonstrate its strength and adaptability on the global stage.

As policy shifts reshape the landscape, we remain committed to supporting our partners, clients, and investors with insights that help them navigate volatility and seize long-term opportunities. Whether you’re involved in exports, trade policy, or sector-based investing, our expertise ensures you’re positioned for both protection and growth.

The approval of France’s €5 billion reinsurance scheme highlights the fragility of international trade and the importance of swift, strategic policy action. As transatlantic tensions rise and new tariffs loom, the global wine and spirits industry stands at a critical crossroads.

At Vinho, we’ll continue to track these developments and keep you informed with timely, actionable insights. Whether you’re invested in the sector or simply passionate about its future, we’re here to help you navigate challenges with confidence and clarity.

Stay connected for future updates and as always, don’t hesitate to reach out for guidance aligned with your investment goals.

Vinho
Your Partner in Fine Wine