The Spanish wine industry, a cornerstone of the nation's agri-food exports, is facing a critical juncture following the United States government's announcement that it will impose a 20% tariff on European wines, effective April 9, 2025.
This decision directly threatens Spain’s second-largest export market by value—the United States, just behind Germany.
In 2024, Spain exported more than 60% of its wine production, amounting to 1.935 billion liters and generating revenues of over EUR 2.977 billion. The United States accounted for 97 million liters of this volume, worth EUR 390 million. Despite a 4.4% decline in volume, the value of exports to the U.S. rose by 3.5%, largely thanks to higher value-added wines, particularly those under Protected Designation of Origin (PDO)—representing 52% of the value and 31% of the volume. Sparkling wines also made up a significant share, with 20% of value and 24% of volume.
But with the new tariff policy, the future of this trade relationship is in jeopardy.
A Disruptive Blow to a Fragile Balance
The Spanish Wine Federation (FEV) has voiced grave concerns over the consequences of the tariff. With 99% of Spanish wineries being small or medium-sized businesses, the sector has limited flexibility to swiftly redirect exports or absorb such sudden economic shocks. Many of these producers rely on the U.S. for visibility and growth—something that’s not easily replicated in other markets.
At a broader scale, the United States remains the top non-EU destination for European wine, importing EUR 4.88 billion worth from the EU in 2024—28% of the total value of EU wine exports. The FEV warns that no other market currently exists that could absorb such volume, should the American outlet constrict under trade pressure.
The tariff not only disrupts economic flows, but also undermines the Declaration of Principles on Wine Trade, signed in 2020 between the EU and U.S., which upheld fairness, cooperation, and market openness in the wine trade. The FEV sees this move as a fundamental breach of that mutual understanding.
A Global Shake-Up
Other wine-exporting nations are also caught in the crosshairs of the U.S. tariff policy, though with differing rates: Australia, Chile, and Argentina will face 10% tariffs, while South Africa will confront a higher 30% rate. This creates added competitive pressure in alternative markets, which will be flooded with wines seeking new homes.
Support from Spain and the EU
In response, the Spanish government has swiftly rolled out a support package for affected wine producers. The plan includes increased promotional activities in strategic markets, funding for internationalization efforts, and financial support for small producers. Organizations such as the FEV and the Interprofessional Wine Organization (OIVE) have welcomed the plan, though they stress the urgency of EU-level interventions.
Brussels has also stepped in, with the European Commission proposing a new series of regulatory and financial measures to safeguard the wine sector. These include:
- Extending promotional periods in third countries from 3 to 5 years.
- Including wine tourism as a CAP-subsidized activity.
- Modernizing regulations on dealcoholized and aromatized wines.
- Introducing a common digital label across the EU to streamline information.
- Supporting vineyard restructuring to enhance sustainability without expanding production.
- Providing up to 80% aid for investments related to climate change adaptation.
- Considering voluntary vine uprooting aid for crisis management.
Looking Ahead
As the global wine market adjusts to this new shock, resilience, diplomacy, and innovation will be key. For Spain, the immediate priority remains avoiding a deep rupture with the U.S. market, while long-term strategies will focus on diversifying exports, strengthening internal demand, and modernizing the industry.
The coming months will be decisive in determining whether the Spanish wine sector can weather the storm—or emerge stronger from it.
Source: Vinetur