Across Europe’s sprawling fields and vineyards, a storm is brewing, and it’s not the weather. The specter of a U.S.-EU trade war has farmers fearing for their livelihoods, as U.S. President Donald Trump pledges to impose up to a 20% tariff on European goods.
For EU farmers, already grappling with rising input costs and regulatory hurdles, such a move could be devastating. History provides a grim precedent: during Mr. Trump’s first term, tariffs on French wine, Italian cheese, and Scottish whiskey amid the Airbus-Boeing subsidy dispute cost European producers over €1.3 billion in the first year alone. French winemakers alone suffered €600 million in losses.
This time, the stakes are even higher. Agricultural exports to the U.S. exceeded €19.6 billion and generated a surplus of over €10 billion in January – August 2024, making the U.S. the EU’s second-largest market after the U.K. Tariffs targeting olive oil, wine, brandy, and other goods—easily substituted by U.S. alternatives—would disproportionately affect agricultural powerhouses like France, Germany and Italy.
The crisis would come as farmers are already reeling from a volatile fertilizer market. Prices skyrocketed during 2021-2023, driven by supply-chain disruptions and geopolitical turmoil, including sanctions on Russian goods. Although fertilizer costs have cooled from their 2022 peaks, they remain well above pre-crisis levels. Nitrogen fertilizer, for instance, is still 14% more expensive than the 2019-2021 average, and phosphate prices are 39.5% higher.
The knock-on effects have rippled through food markets. Even as the pace of food price inflation slowed to 2.8% in November 2024—down from 15.5% in March—staples like butter have seen staggering price increases of up to 63% year-over-year.
“For us, every input—fertilizer, energy, labour—is getting more expensive. If tariffs are added to that, it’s not just our businesses at stake; it’s the affordability of food for European consumers,” said Pierre Lacroix, a winemaker in southern France.
If the U.S. moves forward with tariffs, the EU faces difficult decisions. Retaliatory tariffs could target U.S. fertilizers, which make up just 2-3% of the bloc’s supply and are replaceable. But the options for escalation are constrained. Key U.S. exports to Europe—like hydrocarbons—are critical to the EU’s energy needs, and tariffs on these would only exacerbate costs for European consumers.
Moreover, a simultaneous trade war with the U.S. and China—Europe’s two largest trading partners—could push the EU economy to the brink. A recent example: tariffs against Chinese electric vehicles introduced by the EU in October led to retaliatory measures from China against French cognac and brandy imports (with tariffs of 34-39%). Meanwhile, EU has already severed ties with Russia, its third-largest trading partner before 2022, leaving less room for maneuver.
EU officials are pushing for a diplomatic approach to stave off escalation. “Our priority must be to protect our farmers while maintaining open dialogue with the U.S.,” said a senior European Commission official who spoke on condition of anonymity.
Experts argue that Europe’s best hope lies in a combination of strategic diplomacy and domestic reform. While the EU must engage with Washington to address trade imbalances and mitigate tariff threats, it also needs to cut costs for its farmers by easing regulations and reducing the price of fertilizers and fuel.
“This is a moment for pragmatism,” said Giorgio Cavallini, an economist with Rome-based think tank CIPS. “The EU can’t afford to alienate the U.S., China, and Russia all at once. But it also can’t afford to leave its farmers out to dry.”
One potential measure involves cutting import duties on fertilizers from suppliers like Trinidad and Tobago and Russia though such a move could face political resistance given the EU’s political stance on Russia. Additionally, it would require sending a clear message that such duties will not be reinstated in the future. Another strategy could involve diversifying trade ties with Global South markets to offset losses in the U.S.
For now, however, Europe’s farmers are left waiting, watching the political winds across the Atlantic, and hoping they won’t bear the brunt of another trade war. “We can handle droughts, floods, and market swings,” Mr. Lacroix said. “But this? It’s out of our hands—and that’s the most terrifying part.”
The original article was published in Marianne Magazine
