Spain: Spanish wine facing the abyss because of US tariffs

The sectorial organization FEV estimates that 90% of wineries would lose between 30% and 50% of their sales due to this tax. The US is the third largest export destination of Spanish wines.


While Spanish farmers are conducting a series of demonstrations, which will last until at least the middle of this month, sectors such as wine are facing an additional obstacle from October 18, the 25% tariffs applied by the Trump Administration.

The Spanish Wine Federation (FVE) estimates that nine out of ten Spanish wineries are being affected by the tariffs. Furthermore, they warn that, if these tariffs were extended at least until March, their sales would be reduced by between 35 and 50%.

The US is the third largest export destination of Spanish wines, with an average of 283 million euros in annual sales and one out of every four producers has it as their main partner out of Spain.

According to the FEV, 90% of the Spanish wineries have had to raise the price by an average of 17% due to the extra cost.

Spain is a large exporter of wine, mostly in bulk, whose main buyers are France and Germany, Meanwhile the US only buys 5% of what it imports from Spain in bulk. The US market is the second most important for the Spanish bottled wines after the UK.

If these tariffs are finally confirmed, the EU could launch a counterattack, using as a pretext the foreseeable WTO ruling against American official aid to Boeing. 

Brussels has already taken action and, in order to counteract the tariffs impact, in mid-January –at the request of France and Spain- approved an increase in EU funding from 50 to 60% for wine promotion programs over the next 12 months.

A week ago, the Spanish Minister for Agriculture participated in a working lunch of EU ministers with Sonny Purdue, their US counterpart, in which he expressed his complaints about the tariffs.

Federico Steinberg, researcher of the think tank Real Instituto Elcano, is nevertheless cautious and reminds “the one to have to change is Trump, who continues using tariffs as a measure of pressure”. For this reason, he supports “opening new markets and exploring higher quality products”.

Spain, with 950,000 hectares, has the largest vineyard area in the world (13% of total acreage) and is the third largest producer after France and Italy. In the 2019/2020 campaign, up until November, wine Spanish production was 37.2 million hectoliters. In 2018, Spain wineries’ turnover amounted to 7 billion euros.

Source: ABC