The European Commission has granted approval for a €5 billion ($5.6 billion) French re-insurance scheme designed to support the export of French wines and spirits to the United States. Announced on May 8, the approval falls within the framework of the existing Cap Francexport regime and complies with EU state aid regulations.
This temporary measure provides short-term guarantees to French companies that offer insurance against both commercial and political risks tied to payment obligations in export transactions. The scheme, effective from May 8 to July 8, aims to assist French businesses exporting to the US before new tariffs are implemented.
The US government unveiled a new set of tariffs on April 2, targeting a broad range of EU-imported goods, including a 20% levy on agri-food products and beverages, such as wine and spirits. Although a temporary 90-day pause on some of these tariffs was issued on April 9, accompanied by a suspension of planned EU countermeasures, uncertainty remains over the long-term impact.
European Commission President Ursula von der Leyen has stated that if ongoing negotiations fail to yield a satisfactory outcome, the EU is prepared to reinstate its countermeasures. The Commission has concluded that the French re-insurance scheme is “necessary, appropriate, and proportionate” to facilitate exports of French wine and spirits to the US during this temporary period.
The Commission also noted that the measure has an “incentive effect,” as exporters would be unlikely to proceed with transactions without the support it provides.
In April, Ignacio Sánchez-Recarte, secretary general of the Comité Européen des Entreprises Vins (CEEV), expressed concerns that winemakers would face significant challenges in adapting to the new tariffs. Speaking to Just Drinks, he stated that producers would need to “re-evaluate” their export strategies in light of the 20% tariff.
Teresa Ribera, Commission executive vice-president, emphasized the Commission’s swift response to France’s request, citing potential EU-wide export credit shortages to the US during this period. Ribera also indicated that the same approach would be applied to future similar cases presented by EU member states.
The Fédération des Exportateurs de Vins & Spiritueux de France (FEVS) reported that the US remains the largest market for French wine and spirit exports. According to FEVS data, France’s overall wine and spirit exports decreased slightly by 0.1% in volume to 173.9 million cases in the past year. However, export sales to the US rose by 5%, reaching €3.8 billion, largely due to wholesalers replenishing stock. While wine exports experienced an 8.4% rebound, spirits remained stable.
As French exporters navigate a volatile tariff landscape, the approval of the re-insurance scheme offers a critical buffer against the looming economic uncertainties associated with the ongoing trade tensions between the EU and the US.
You Might Be Interested In:
