In-Depth Analysis of the Impact of U.S. 200% Tariff Threats on the French Wine and Champagne Industry

Based on the latest market data and analysis reports, I will provide you with a systematic analysis of the profound impact of the U.S. 200% tariff threat on the French wine and champagne industry.

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On March 13, 2025, U.S. President Trump issued a statement on social media threatening to impose a

[1] on wine, champagne, and alcoholic products from EU countries including France. This move is a direct retaliation against the EU’s plan to impose a 50% tariff on American whiskey — a measure the EU took in response to the U.S.'s previous 25% tariff on EU steel and aluminum products[1].

However, according to a PBS report, this 200% tariff threat

[1]. The EU’s tax plan targeting American whiskey has been postponed multiple times, with the latest news indicating it will be delayed until February 2026. Meanwhile, the U.S. and the EU reached a trade agreement in the summer of 2025, setting a unified 15% tariff for most EU imported goods[1].

Although the 200% tariff threat was not fully implemented, the French wine and champagne industry still faces significant policy uncertainty:

Tariff Type	Applicable Products	Tariff Rate	Status
Steel-Aluminum Linked Tariff	EU Goods	25%	Implemented
Trade Agreement Tariff	Most EU Goods	15%	Effective in 2025
200% Tariff Threat	Wine/Champagne	200%	Threatened, not fully implemented

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Moët Hennessy, the core wine and spirits business of LVMH, is facing an

[2][3]:

• Sustained significant decline in financial performance for two consecutive years[3]
• 2025 operating results declined significantly compared to 2024
• Morgan Stanley projects that 2026 operating profit will drop to
  €988 million
  , with an operating profit margin of only
  18.1%
  , the lowest level since 2010[2]

• In April 2025, it announced layoffs of
  over 10%
  of its workforce, affecting approximately
  1,200 employees
  [3]
• Moët Hennessy Champagne Services (MHCS) suspended its annual profit-sharing bonus for employees for the first time since its establishment in 1968; this bonus typically accounts for
  15%-30%
  of workers’ annual salaries[3]
• On January 15, 2026, the CGT union called for workers to go on strike[3]
• Management proposed a pre-tax compensation payment of €1,000 per employee, which the union dismissed as “completely insufficient”[3]

On January 19, 2026, Morgan Stanley downgraded LVMH’s stock rating from “Overweight” to “Equal Weight”[2], mainly due to the following reasons:

• The stock price is already at the top of its long-term valuation range, with a 12-month forward price-to-earnings ratio of approximately
  26.1x
  , far exceeding the long-term average of 20.5x
• Over 90% of the stock price increase since the summer of 2025 has come from valuation expansion, rather than earnings growth
• Profit margins in 2026 are expected to be hit by
  150 basis points
  due to exchange rate fluctuations and new tariffs[2]

According to industry analysis reports, demand for French champagne in the U.S. market has declined significantly[4]:

• Entry-level non-vintage champagne
  has been hit the hardest; prices have risen from approximately $45 to the $60 range, reducing consumer purchase intent
• Sparkling Wine Substitution Trend
  : Consumers are shifting to sparkling wines from other regions and non-champagne beverages
• Luxury cuvées
  have performed relatively steadily, with the purchasing power of high-end consumer groups not significantly affected

• Chinese Market
  : LVMH explicitly stated that high tariff pressures in China and the U.S. are among the main reasons for its performance decline[2][4]
• Domestic Market Pressure
  : Domestic wine consumption in France has continued to decline, falling from 29.8 million hectoliters in 2010 to 10.2 million hectoliters in 2024, with per capita consumption dropping from 46.7 liters to 22.5 liters[4]

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• Implemented a workforce reduction of over 10%, affecting approximately 1,200 positions[3]
• Management proposed a symbolic compensation plan (€1,000 per employee) to address cost pressures

• LVMH appointed veteran CFO Arnault Hier to lead Moët Hennessy[3]
• Laura Burdese was appointed as Bvlgari’s next CEO, indicating that the group is undergoing strategic personnel adjustments[3]

In the face of uncertainties in the U.S. market, major alcoholic beverage companies are adopting the following strategies[4]:

Strategy Direction	Specific Measures
Market Diversification	Rebalance investment portfolio, tilt towards low-tariff sources
Alternative Market Development	Expand into China, Asia, and other emerging markets
Supply Chain Adjustment	Seek alternative suppliers, renegotiate contracts
Product Innovation	Accelerate adoption of lightweight or alternative packaging (cans, PET bottles)
Localized Production	Evaluate the feasibility of establishing production bases in the U.S.

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According to projections from Morgan Stanley and industry analysts[2][4]:

:

• If the U.S. and EU reach a trade agreement and eliminate or reduce wine tariffs, price pressures will be alleviated
• U.S. high-end consumer demand remains resilient, supporting luxury champagne sales

:

• Tariff risks persist, keeping import costs high
• Consumers shift to domestic or alternative regional substitutes
• Industry profit margins remain under pressure

In addition to tariff factors, the French wine industry also faces:

1. Domestic Consumption Decline
   : Continued downward trend in domestic wine consumption in France
2. Climate Pressure
   : Extreme weather affects grape yield and quality
3. Rising Costs
   : Increased costs of raw materials such as glass and corks
4. Global Competition
   : Rise of New World wine brands

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1. Profound Impact of Tariff Threats
   : Although the 200% tariff was not fully implemented, persistent policy uncertainty has already caused substantial harm to the French wine industry
2. Dual Pressures on LVMH
   : It must cope with cost increases from tariffs while addressing internal labor conflicts and performance declines
3. Industry Structural Transformation
   : Forced to shift from scale expansion to profit orientation, and from U.S. market dependence to a globalized layout
4. Short-Term Growing Pains Unavoidable
   : 2026 industry profit margins are expected to remain at historically low levels, with recovery dependent on clearer trade conditions

• Progress in trade negotiations may affect the actual implementation of tariffs
• EUR/USD exchange rate fluctuations will amplify the impact of tariffs
• Uncertainty exists regarding the pace of consumption recovery in the Chinese market
• Tense labor relations may affect production and operational stability

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[1] PBS NewsHour - “These Trump tariff threats never materialized in 2025” (https://www.pbs.org/newshour/politics/these-trump-tariff-threats-never-materialized-in-2025)

[2] Investing.com - “LVMH shares slide as Morgan Stanley downgrades on tariff risks, limited upside” (https://ca.investing.com/news/stock-market-news/lvmh-shares-slide-as-morgan-stanley-downgrades-on-tariff-risks-limited-upside-4407723)

[3] Vinetur - “Moët Hennessy Workers Strike After Losing Annual Bonus Worth up to 30 Percent of Salary” (https://www.vinetur.com/en/2026011694922/moet-hennessy-workers-strike-after-losing-annual-bonus-worth-up-to-30-percent-of-salary.html)

[4] OhBev - “US Wine Market 2026 Forecasts and Trends” (https://www.ohbev.com/blog/us-wine-market-2024---trends-and-opportunities-and-beyond)