Sunday, February 05, 2017

What will happen to Italian wine if America enters into a trade war with Europe?

The Italians never thought it would happen. They, led by the French, were marching into a huge new market, China. In that moment, they turned their gaze from America, seeing a new, emerging market filled with hundreds of millions of potential customers for their wines. Every farmer’s daughter was going to Shanghai, Beijing, Tianjin, Guangzhou, Shenzhen, Dongguan, Taipei, Chengdu and Hong Kong with their Barolo, Brunello, their Prosecco and their Moscato. All along, China was developing cheap solar panels, racing to find a way to fulfill their own country’s need for cheap, clean, sustainable energy. And with that came the temptation to import those solar panels to their trading partners in Europe. But trading with China in the solar sector could cost thousands of jobs in Europe, where the solar energy industry had a foothold and was growing at a rapid pace. The EU threatened a steep tariff on solar panels imported from China. And China threatened to retaliate on wine with a tariff of up to 47%. A trade war loomed. And while this threat was greater to France, and even Spain, Italy also felt the slap from the big hand of China.


Could it happen today, between America and Europe, a similar threat? According to a conversation I had this past week with a prestigious family producer from Italy, yes it can. European leaders are suspicious of American leadership. There is a fog of volatility that has rolled in, the likes of which hasn’t been felt since the 1970’s. But the 1970’s didn’t have the global thread of communication of commerce the interconnectedness that we all have today. The interdependence that some leaders cast a blind eye to, but which nonetheless exists. So yes, the Italians are nervous.

From the look of things in 2017, so far, business is good. Things are humming right along. Italian wine still seems to have a good momentum coming off a relatively robust year, 2016. I say this with the knowledge of data that I am privy to, commercial data that even surprised me. As it continues to do.

“We are a satellite of America,” my Italian colleague said, over a globally inspired lunch of barbecued chicken and spinach salad, New Zealand Sauvignon Blanc and prickly pear kombucha. It took me off guard to hear those words said. I identify as an American with Italian roots, and I love the country that my grandfathers and grandmothers immigrated to over 100 years ago. I see the limitless horizon of opportunity, as many of us immigrants and children of immigrants must see and feel when they look to America and make the often perilous trek to the land of the free. “You must understand that to us, America is a beacon of freedom for the world.” I’m sitting across a member of a venerated Italian wine family, one of the first families of Italian wine. And I’m truly astonished to hear this. And again, she says, “We are a satellite of America.”

In a sense I understand this too well. I spend all of my working time around Italian wine, around Italian restaurants and often first, second and third generation Italian immigrants. I’m steeped in the tea of Italianit√°. It was then that I felt a deep commitment, once again, tugging at my heartstrings, a little voice inside, from ages past and days not yet born saying “Help them get over to your side, help them to get a place at the table.” No kidding, this is how I think and feel about it. It’s not about selling more wine; it’s not about being in the cool kid’s club. It’s about finding ways, often extremely difficult, given the myriad of laws and regulations in the alcohol beverage industry among the 50 states, to help my Italian cousins in this land of opportunity.

So to imagine that America might be going into a potential trade war with Europe - no matter how capriciously it might be constructed by the Steve Bannon’s of the world – it was truly an alarming thought for the future of Italian wine in America.

Yes, things are so much better than it was 25, 35, 50 years ago in the world of Italian wine in America. Now we have the luxury of groaning when we see one too many Erbaluce’s on hipster wine lists. But I see a new battle looming on the horizon, one which might be more than just one of have a greater selection. You think it couldn’t happen here? How many jaw dropping events must one witness before one realizes they are not on solid ground but on the deck of the Titanic?

Vigilance, my Italian colleagues. We are in a social and economic climate that is heating up faster than our contentiously debated global climate shift.







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