EU leaders under influence of booze bosses as trade war escalates

BRUSSELS — As the scion of a 700-year-old winemaking dynasty, Florentine Marquis Lamberto Frescobaldi knows better than anyone that patience is a virtue. And when it comes to tariffs, the Italian government is taking his side.

When POLITICO met Frescobaldi last Friday in the marbled interior of the Italian ambassador’s residence in Brussels, he said he had just been reassured by Foreign Minister Antonio Tajani that he would do all he can to spare the wine sector from the escalating trade war with Donald Trump.

Scenes like this have become the new normal as European liquor industry bosses apply their marketing talents to the business of political persuasion. And leaders of the European Union’s biggest alcohol producing nations are repeating the talking points of makers of wine, Champagne and whiskey by urging restraint as transatlantic trade tensions escalate.

“Flexing muscles is silly,” Tajani said Sunday, urging Brussels to instead be “prudent,” and echoing a point made by Prime Minister Giorgia Meloni and other top Italian officials over the past days.

It took just a day and a half for a tit-for-tat trade row to escalate earlier this month into a potentially existential threat to the European drinks industry.

First, Trump on March 12 imposed 25 percent duties on all imports of steel and aluminum into the United States.  

The European Commission immediately hit back by threatening to reinstate earlier tariffs on a list of iconic American goods that included a 50 percent levy on Kentucky bourbon. Brussels is also considering putting tariffs on more wines, beers and spirits as part of a broader response that would target some €18 billion in U.S. exports.

The next morning, Trump went ballistic, threatening a 200 percent tariff on all European wines and spirits.

That’s when the alcohol lobby got to work.

Frescobaldi, who also heads wine trade organization Unione Italiana Vini, said Tajani explicitly promised to ask to remove not only spirits but also wine from the Commission’s retaliation list when he met EU trade chief Maroš Šefčovič in Brussels last Friday. Spokespeople for the Commission and for Tajani both declined to comment on the content of the meeting.

Frescobaldi added that Tajani had asked the Commission to find a more “impactful” sector to slap tariffs on. He declined to specify which sectors those might be.

France, Europe’s top exporter of alcohol to the U.S., was also quick to urge the EU to spare American bourbon from its tariffs.

“Have some missteps been made? Yes, probably, because Kentucky bourbon has been included as if it were a trade threat,” Prime Minister François Bayrou said just three days after Trump’s threat to tax EU booze.

Not in our back yard

It looks like the message has been received and understood by the Commission.

Brussels has delayed its first round of retaliatory tariffs from April 1 to April 13, to allow for more time to negotiate with the Trump administration. 

Ireland has meanwhile taken its own lobbying up a notch with both the Commission and the Trump administration. Foreign Minister Simon Harris placed calls with Šefčovič and U.S. Commerce Secretary Howard Lutnick before the pair held a round of crunch talks in Washington on Tuesday.

And, at a ministerial of EU agriculture ministers, Agriculture Minister Martin Heydon cautioned against including bourbon whiskey in the retaliatory measures.

“What we want to make sure is that any decision Europe takes, they’re informed,” Heydon said.

After six hours of talks with his U.S. counterparts in Washington, Šefčovič pledged that the “hard work” would still go on, stressing a common goal of promoting “industrial strength on both sides.”

Buying time

The extra time also allows Brussels to tailor its own response to the impact of the dreaded — and still unclear — “reciprocal” tariffs that the Trump administration might impose as soon as April 2. 

As he visited Rome on Tuesday, EU Agriculture Commissioner Christophe Hansen said he was “ready maybe to take products off” the EU’s retaliation lists if that helps to defuse the trade war. 

The Commission insists it’s all part of a calibrated and balanced strategy. 

“Our goal is to strike the right balance of products, taking into account the interests of EU producers, exporters and consumers,” said Olof Gill, trade spokesperson at the Commission.

Donald Trump on March 12 imposed 25 percent duties on all imports of steel and aluminum into the United States. | Stringer/Getty Images

“By aligning the timelines, the Commission consults with member states on both lists simultaneously. This provides additional time for discussions with the U.S. administration.” 

But some see it as a sign of weakness. 

“The French and the Italians pushed the Commission to postpone the package so that they could get whiskey out,” said a national official from another EU country, accusing France of not being consistent with its calls for a tougher EU trade policy and for more unity among member countries. 

“There’s been a lot of pressure behind the scenes.”

Giorgio Leali reported from Paris, and Ben Munster and Camille Gijs reported from Brussels. Graphic by Giovanna Coi. This story has been updated to clarify Tajani’s comments.