US-EU trade dispute: "This political war is not our war"

Summary

In this interview, Katie Allah, owner of the prestigious wine label Chateau Smith Haut Lafitte in southwest France, expresses her frustration over new tariffs impacting French wines. She criticizes the unfair exclusion of champagne and spirits from the tax, while smaller winemakers like her, who employ organic and biodynamic practices, are hit hard. The U.S. market represents 20% of her sales, and she fears the growing trend of tariffs and protectionism will damage her business. Despite political disputes, she emphasizes her deep connection and love for American wine enthusiasts.

Takeaways

• 😡 The owner of Chateau Smith Haut Lafitte expresses frustration over a recent tax announcement affecting French wine exports.
• 🇫🇷 She feels that the French government is favoring large luxury groups over smaller organic winemakers like herself.
• 🍇 Chateau Smith Haut Lafitte is an organic and biodynamic winery with low yields, making the new tariffs especially damaging.
• 💰 The U.S. market represents about 20% of their sales, which makes these tariffs a significant financial blow.
• 🍷 Champagne and cognac are not affected by the tariffs, leading to a sense of unfairness among winemakers.
• 🌍 The winery has faced changing markets, such as moving from China to the U.S., based on economic conditions.
• 🚫 The owner questions why Italian wines are exempt from the tariffs, adding to the frustration.
• 🌱 Chateau Smith Haut Lafitte has taken several environmental initiatives, such as recycling CO2 and maintaining beehives.
• 🇺🇸 Despite the tariffs, the owner maintains a positive relationship with American wine lovers and hopes they continue to support French wines.
• 📈 There is concern that global protectionism and tariffs may require a change in their wine-selling strategy, though adapting quickly is challenging for a small operation.

Q & A

What is the initial reaction of the speaker to the announcement of tariffs?

The speaker's reaction is very negative, stating that they are infuriated and feel the situation is unfair, believing that they are victims of political decisions.

How will the tariffs affect Chateau Smith Haut Lafitte?

The tariffs will severely impact Chateau Smith Haut Lafitte, affecting 20% of their sales, especially since they already have high expenses due to their organic and biodynamic farming practices.

Why does the speaker feel there is a sense of injustice regarding the tariffs?

The speaker feels there is injustice because luxury products like champagne and cognac are exempt from the tariffs, while smaller, artisanal producers like them are not, even though they represent French craftsmanship.

What is the role of the US market for Chateau Smith Haut Lafitte?

The US market represents about 20% of Chateau Smith Haut Lafitte's sales, and possibly more, as the strength of the US economy makes it a crucial market for the winery.

What is the speaker's stance on the political situation causing the tariffs?

The speaker expresses confusion and frustration, stating that the dispute over aeronautics between Boeing and Airbus is not their war, yet they are caught in the middle of it.

Why does the speaker mention China and Hong Kong in relation to their wine sales?

The speaker mentions that three years ago, China was a strong market for their wines, but recent issues in Hong Kong and a slowing Chinese economy have affected that, making the US market even more important.

How does the speaker explain the exemption of champagne and cognac from the tariffs?

The speaker suggests that the French government may be more sensitive to larger corporations that pay high taxes and are based in Paris, rather than smaller, independent producers like themselves.

What sustainable practices does Chateau Smith Haut Lafitte engage in?

Chateau Smith Haut Lafitte engages in several sustainable practices, including organic and biodynamic farming, recycling CO2 emissions from the harvest, producing bicarbonate of soda, and maintaining beehives.

Why does the speaker feel the tax policy is inconsistent and unfair towards European wines?

The speaker questions why Italian wines are spared from the tariffs, even though Italy is part of Europe, and believes all countries should be taxed the same way, calling the current situation scandalous.

What does the speaker hope will happen in response to the tariffs?

The speaker hopes that the French government will increase its lobbying efforts and that the community of vintners will rise up to demand fairness in the handling of tariffs.