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00:00President Trump is threatening to slap 200% tariffs on alcohol from the European Union.
00:05It's in response to the bloc's placing a flat duty of 50% on US whiskey.
00:11That move itself in retaliation to steal an aluminium tariff from Washington.
00:16While the tit for tat is further escalating tensions between the two sides
00:19who have been long time trading partners.
00:22Luke Schrager has more.
00:24The transatlantic trade spat escalates again and this time it's alcohol in the firing line.
00:30The European Union has just put a nasty 50% tariff on whiskey.
00:34If this tariff is not removed immediately, the US will shortly place a 200% tariff on all wines,
00:41champagnes and alcoholic products coming out of France and other EU represented countries.
00:47That 50% import duty is itself a response to Donald Trump's own tariffs on steel and aluminium.
00:53The European Union stated on Wednesday it would allow levies on 26 billion euros worth of US
00:59products, previously suspended, to come in on April 1st.
01:03Despite the mounting trade war, Brussels has left the door open to negotiation.
01:07We are prepared for whatever might come and we have been preparing for over a year.
01:12For over a year.
01:13We want to be very, very clear on this, that the EU is not part of the problem here
01:19and the suggestion that we are part of the problem is deeply misguided.
01:26We believe that we should be working with the US to be part of the solution.
01:31EU wine exports to the United States were worth nearly 5 billion euros last year,
01:37according to statistics agency Eurostat.
01:39Nearly a third of its total wine exports globally, with France and Italy making up the majority.
01:45The sector saw a major slowdown last time Donald Trump was in office,
01:49with far less extreme tariffs in place.
01:52Elsewhere, though, on another front of the trade war,
01:55Canadians have come up with their own solution when it comes to alcohol,
02:00simply boycotting American spirits, among other products.
02:03But in the meantime, Europe's alcohol industry faces an uncertain future.
02:10Let's bring in Dr Ignacio Sanchez Ricarte now.
02:13He's the Secretary General of CIV.
02:15It's the largest European wine industry lobby.
02:18Great to have you on the programme, Ignacio.
02:20Thank you so much for joining us.
02:22First of all, I'd just love to get your reaction to this threat of 200% tariffs on alcohol
02:27from the European Union that Washington is now threatening to put in place.
02:32So, thank you very much and thank you for the invitation.
02:36When we heard about Donald Trump announcement, we shake because 200% tariffs on EU wines means
02:45the fact that the US market will be closed to our wines.
02:50There is no way that EU wines will be able to reach the market with such a huge tariff imposed to us.
02:59And just speak to us more about this impact this move could have.
03:04Have you been speaking to business owners, for example?
03:07Just talk to us about the impact.
03:10So, you need to imagine that 27% of our exports globally go to the United States
03:18and our best wines reach the markets.
03:20I mean, US winemakers, US wine consumers love our wines and they have a very good tasting.
03:27So, from one day to the other, we will be stopping shipping our wines there
03:32because there is no way we can sell them without 200%.
03:36Immediately, there will be a €5 billion stop, impact.
03:42And then we need to think about the intermediate impact on wine companies
03:47because we have to produce the wines.
03:49We have the vines, we have the grapes, we continue the harvest,
03:53but we don't have a place to put our wines.
03:55We don't have an alternative market.
03:57So, it will be a hard, hard hit on the long-term economic sustainability of our wine companies.
04:04And what is Steve likely to do now?
04:06What's next for you?
04:07How are you going to try to cushion this blow if Trump does follow through on his threat?
04:14So, happily for years, I mean, more than a decade,
04:17we have an extremely good relation with the US wine industry.
04:21And we have agreed to maintain what we call a wine for wine approach,
04:25which is keep, please, wine outside of any retaliation list,
04:30outside of any unrelated trade dispute.
04:33So, what we are begging, we are asking the European Commission
04:38and our colleagues will have to ask the US administration is
04:42resolve the problem of steel and aluminum,
04:44but please do it without including wines in the retaliatory list.
04:51For example, the European Commission is now opening a public consultation,
04:57a stakeholder consultation on the list of products to be impacted by EU countermeasures.
05:04We have already said it, black and white,
05:06we don't want our US wine colleagues to be impacted by these measures.
05:11We won't be out of any kind of retaliation.
05:15And do you believe that the EU will listen to your calls?
05:17Do you think that they'll stop here?
05:19Do you think that they will continue to issue tariffs in retaliation to Trump's threats?
05:26It is difficult because when we discussed with the Commission,
05:29the Commission said we didn't start this.
05:31So, it should be the US administration to stop hitting EU companies.
05:38I remain relatively optimistic that the period that the Commission is proposing
05:45to the Trump administration to negotiate these disputes,
05:50so these 15 days between now and the entry into force of the first set of tariffs,
05:57or one month before the new EU tariffs will be implemented.
06:03I really hope and remain a little bit optimistic
06:06that the two administrations will reach a medium agreement
06:11so that we are not that much impacted.
06:14We'll have to see how it all plays out.
06:16Ignacio, good luck. We hope everything works out.
06:19Thank you so much for joining us on the programme.
06:21It's great to have your insight there.
06:23Thank you very much.