World news – Trump tariffs for cognac hit a French success story

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In the past decade, cognac distillery owners have more than doubled their sales to the US, making their spirit one of France’s fastest growing major exports. Then Donald Trump came along.

While the French are little cognac drinkers, the Americans consume almost every second bottle made in the vineyards north of Bordeaux, thanks in part to alcohol, which the US rappers use as a symbol of prosperity and promote luxury.

And while millionaires like Snoop Dogg and Jay-Z can still afford their beloved « yak », many other Americans may find it unattainable after the US import tariffs of 25 percent went into effect on Tuesday / p> The US « is a rapidly evolving and priority market for our industry and is even seeing growth this year despite the impact of Covid-19, » Raphael Delpech, general director of the BNIC cognac industry association, told AFP.

The tariffs were confirmed by the Trump administration on New Year’s Eve. This was the outgoing U.S. president’s latest trade volley and yet another escalation of a longstanding transatlantic feud.

Cognac, which is said to be taxed along with other grape-based spirits from France and Germany, is a collateral victim in a dispute between Washington and Europe over Subsidies granted to their commercial aircraft manufacturers Boeing and Airbus.

European wines, cheeses and olive oils have been subject to import duties of 25 percent in the USA since October 2019, while Europe offers products from American orange juice to ketchup with its own measures.

« All French wines and spirits, not just cognac, are now affected by diplomatic tensions that have nothing to do with us, » complained Delpech.

FEVS, a French exporters association, has estimated that the wine and spirits sector could lose more than 1 billion euros in annual sales in the USA due to the tariffs, provided d he is not going to reverse the new President Joe Biden.

The trade has shown the extent to which the centuries-old Charente cognac houses have become dependent on the American thirst for their products, some of which retail for hundreds of dollars .

The prospect of long-term tariffs has revived memories of the only major downturn the industry has seen in the last 20 years during the 2008-2009 global financial crisis.

The explosive growth since then – exports to the USA has doubled to over 100 million bottles a year – fueled by the unlikely connection of conservative cognac dynasties in their towers with the flashy world of US hip-hop.

Jay Z, who puffed cigars, raved in 1996 his hit « Can’t Knock The Hustle » from « Sipping Remy on the Rocks With My Crew », while Busta Rhymes released « Pass The Courvoisier II » in 2001, a milestone for them Industry.

Since then, big brands like Remy Martin, Hennessy, Courvoisier, Martell or Louis XIII have seized the commercial opportunities and formed partnerships with artists from Pharrell Williams, Nas, A $ AP Ferg to Quavo.

Cognac is being established Much appreciated by female rappers, but also popular and often drunk in cocktails by Americans.

According to Delpech, the industry « has built a very strong connection with American consumers over the decades by investing heavily ». </ Jean-Pierre Cointreau, head of high-end cognac house Maison Frapin, believes stocks are high enough in the US that consumers don't see an immediate impact on prices.

And he hopes that the future Biden government, which includes many Francophile figures, including the next foreign minister, Antony Blinken, will work to reverse the tariffs.

« I tend to believe that the French and the American The American government are determined to resolve this issue, « he told AFP.

His company also has strong ties to Asia, particularly China, where cognac also benefits from its association with France’s reputation as a luxury company. </ p "It makes this time very complicated," said Cointreau of US tariffs, adding that bars and restaurants closings due to Covid-19 shutdowns and a reduction in duty free and airline sales are affecting the entire industry met.

(This story was not edited by NDTV staff and is automatically generated from a syndicated feed.)

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