French Cognac Makers Boost US Exports Ahead of Trump Inauguration

PARIS (Reuters) - French cognac producers have increased shipments to the United States in anticipation of potential new tariffs under incoming President Donald Trump, trade data showed. The US is the largest market for cognac by volume, accounting for nearly 38% of exports, making it a crucial market for the industry's growth.

LVMH's Hennessy, the largest producer, increased the amount of cognac it delivered by 17% compared to last month and by over a third when compared to the same month the year before, U.S. import records from ImportYeti showed. Campari-owned Courvoisier more than doubled its exports to the country in December from both the previous month and the same month last year.

The data was part of a wider pattern of increased U.S. cognac exports at the end of 2024, an industry source said on Friday, driven by the prospect of additional tariffs under incoming President Donald Trump and a general market improvement. Trump has threatened to impose across-the-board tariffs of 10% on foreign-made goods in a bid to eliminate the country's trade deficit. Europe's spirits industry could be hit even harder by possible additional retaliatory measures should an old trade dispute between the U.S. and the European Union from Trump's first presidential term flare up.

Meanwhile, demand for luxury goods in the US showed signs of improvement. U.S. credit card spending on luxury brands in December turned positive for the first time in more than two years, while Swiss jewellery and watchmaker Richemont reported strong U.S. sales in the last quarter of 2024. Barclays analysts also flagged a positive trend, saying in a recent note that LVMH's wines and spirits division has "started to see some improvement for Hennessy in the US."



The cognac industry's dependence on the US market is significant, with the US being the largest market for cognac by volume. In 2022, about 97.2% of cognac exports were sold outside of France, with the US being one of the leading markets. This high level of dependence on the US market is a concern for the cognac industry, as any changes in US trade policies or consumer preferences could have a significant impact on sales and profitability.

In comparison, other French luxury goods sectors may have a more diversified customer base. For example, the French wine industry exports to a wide range of countries, with the US being one of the largest markets, but not the only one. Similarly, the French fashion and luxury goods industry has a global customer base, with significant sales in Europe, Asia, and the Middle East, in addition to the US.

However, it is worth noting that the US is an important market for many French luxury goods sectors, and any changes in US trade policies or consumer preferences could have an impact on these industries as well. Therefore, while the cognac industry may be more dependent on the US market than some other French luxury goods sectors, it is not the only industry at risk from changes in US trade policies.



In conclusion, French cognac producers have taken proactive measures to increase exports to the US in anticipation of potential new tariffs under incoming President Donald Trump. The US market is crucial for the cognac industry's growth, and any changes in US trade policies or consumer preferences could have a significant impact on sales and profitability. While other French luxury goods sectors may have a more diversified customer base, the US remains an important market for many of these industries, and any changes in US trade policies or consumer preferences could have an impact on their sales as well.