Collateral damage: How Cognac is paying the price for Europe’s trade wars

As the Cognac harvest concludes in southwestern France, winegrowers face another challenging year. The 300-year-old brandy, produced exclusively around the Charente River, has become entangled in trade conflicts between the EU and China, as well as strained relations with the US. The industry, deeply rooted in the EU, has seen a decline in sales, with 98% of production exported outside the European Union.

Unseasonable drought has somewhat mitigated the impact by reducing supply closer to demand. However, Cognac sales have plummeted from 230 million to 140 million bottles since 2023. Major trading houses such as Rémy Martin, Hennessy, Martell, and Courvoisier had to reduce their orders from winegrowers due to cancellations of contracts.

France, a strong supporter of EU actions against Chinese electric vehicles (EVs), faced retaliation when China imposed provisional duties of up to 34.8% on Cognac in 2024. This was followed by US tariffs in April 2025, which further exacerbated the situation. The European Union and US reached an agreement at Turnberry, Scotland, imposing a 15% tariff on most European exports, including Cognac.

Without a clear resolution in sight, the Cognac industry is left to navigate a storm of tariffs and uncertainties. French MEP Eric Sargiacomo argues that the European Union must protect sectors affected by retaliatory trade measures, suggesting the need for solidarity mechanisms.