Mixed emotions for wine producers over U.S. tariffs

CGTN Europe

European wine producers are expecting orders from the U.S. to be halved, due to the 20% tariff imposed on alcohol. But there has been some relief across the sector, after fears the levy was going to be significantly higher. Our correspondent Johannes Pleschberger reports from Vienna.

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00:00Wine grower Gerhard Lobner feared entirely losing his biggest export market.

00:07Now that US tariffs are much lower than expected,

00:10the Viennese businessman can continue shipping wine to America.

00:14It's however uncertain how many customers will cancel due to increased prices.

00:19If the Americans want to build a wall around their country

00:23and only want to drink woody Chardonnay from the Central Valley,

00:26then so be it.

00:31Instead of the previously announced 200%,

00:34Washington ultimately decided on 20%.

00:37Nevertheless, some Austrian wine growers fear this measure will cut US orders in half,

00:42adding another existential threat after the Covid pandemic and high inflation hit local vineyards.

00:48Vienna calls itself the world's only capital with significant wine production within city limits,

00:55but continuing production with less American customers will be challenging.

01:00If there is too much wine here in Europe,

01:02the wine growers will have a real problem because the prices go really, really down

01:09and they have no income with this wine.

01:15Europe exports roughly $5 billion worth of wine to the US each year.

01:20If American customers stop buying that wine because of higher prices,

01:24export revenue might drop by up to 20%.

01:28The EU Commission wants to help wine growers adapt by unlocking new market opportunities

01:34such as low alcohol wine, which more and more younger Europeans are choosing for health reasons.

01:42Another solution is going east.

01:45Last year, Austrian wine exports increased by 11% to countries like Japan, South Korea and China.

01:51It's a trend many Viennese wine growers hope will continue

01:54with some already traveling to Beijing to meet potential buyers.

02:00I do think that China is an exciting wine market.

02:03And Austrian white wine goes perfectly with Chinese cuisine.

02:11And even if he loses some American customers,

02:14Loewner is certain his historic winery will continue to thrive,

02:17as it has done for the past 342 years, despite wars and trade wars.

02:23Johannes Blechberger, CGTN, Vienna.

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