• Cognac producers warn new US tariffs could shut them out of their largest export market.
  • Proposed tariffs range from 10% to 25%, potentially raising costs by $157.4 billion in 2025.
  • Industry fears retaliatory measures could disrupt global spirits trade and harm US businesses.

A Dire Warning from Cognac Producers

A senior Cognac industry official has issued a stark warning: President Trump's latest tariff proposal would make it impossible for French brandy producers to sell their products in the United States—their most crucial market. The proposed tariffs, which could climb as high as 25% on imported alcoholic beverages, come amid escalating trade tensions between the US and the EU.

"This isn't just about higher prices—it's about being priced out entirely," said the official, who spoke on condition of anonymity due to the sensitivity of ongoing trade discussions. "The US accounts for nearly half of our global sales. Without tariff-free access, we simply can't compete."

The Economic Fallout

The Cognac industry, which operates under strict geographic designation rules in France's Cognac region, faces unique vulnerabilities. Unlike manufacturers that can relocate production to avoid tariffs, Cognac makers are bound to their terroir. The proposed duties follow earlier trade skirmishes that saw EU retaliate with tariffs on American whiskey, creating lasting damage to US distillers' export markets.

Recent financial data underscores the stakes: US spirits exports to the EU surged 39% to $1.2 billion in 2024, demonstrating the reciprocal nature of transatlantic trade. Cognac shipments to America represent an even larger portion of revenue for major houses like Hennessy and Rémy Martin.

Broader Trade War Fears

Industry analysts warn the proposed tariffs could trigger a new cycle of retaliation, with EU officials already considering countermeasures targeting American products. The move threatens to unravel decades of tariff-free spirits trade that fueled category growth on both sides of the Atlantic.

Smaller US craft distillers—now numbering over 3,000—are particularly vulnerable to losing hard-won export markets. "We remember what happened last time," said one Kentucky bourbon producer, referencing previous trade disputes that devastated American whiskey exports. "Everyone loses in these fights."

Attempts to reach the White House for comment were unsuccessful. EU trade representatives declined to speculate on potential retaliatory measures but emphasized the need to preserve existing trade frameworks.