France’s cognac industry, a cornerstone of the country’s export economy, is under unprecedented pressure from both international trade disputes and the accelerating impacts of climate change. Recent months have seen the imposition of anti-dumping tariffs by China, a move widely interpreted as retaliation for France’s support of EU tariffs on Chinese electric vehicles. These duties have led to a dramatic halving of cognac exports to China since late 2024, costing producers over €50 million per month and threatening the livelihoods of the 72,500 people who depend on the industry. The United States, cognac’s largest export market, has also introduced new tariffs, compounding the financial strain and forcing producers to rethink their global strategies.
At the same time, cognac producers are grappling with the realities of a changing climate. The region’s unique terroir and reliance on the Ugni Blanc grape make it highly sensitive to weather fluctuations. Rising temperatures are causing grapes to ripen earlier, resulting in higher sugar and lower acidity—an unwelcome shift for cognac production, which requires a certain balance for quality. Extreme weather events, such as hail and frost, are becoming more frequent and unpredictable, increasing the risk of harvest failures and threatening the consistency that the industry is known for. Some growers are even considering diversifying into alternative crops like olives or truffles as traditional grape cultivation becomes less viable.
Efforts to resolve the trade dispute are underway, with French President Emmanuel Macron and China’s President Xi Jinping recently agreeing to expedite negotiations to end the cognac tariff conflict. However, even as diplomatic channels work to ease trade tensions, the industry must also invest in adaptation strategies to confront the ongoing threat of climate change. This dual challenge—navigating volatile international markets while safeguarding agricultural traditions against environmental upheaval—underscores the fragility and resilience of France’s storied cognac sector.
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(Source: Fortune | Reuters | Drinks International)
