European wine and spirit producers are sounding the alarm on the newly announced trade framework between the United States and the European Commission.

President Donald Trump and European Commission President Ursula von der Leyen announced the deal, which sets a baseline tariff of 15% on European exports to the United States. 

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The deal does include exemptions for some products, including airliners and their components and certain pharmaceuticals, but as of Tuesday, European alcohol exports, which accounted for more than $9 billion worth of trade last year, will still face the full 15% rate.

Trump and White House officials have said that the US and EU will continue negotiations on several secondary provisions, including agricultural products.

The Comité Européen des Entreprises Vins (CEEV), a trade organization representing European wine producers, called for those negotiations to yield a zero-zero trade deal covering the wine sector.

“[We] are watching with great anticipation the outcome of the upcoming negotiations regarding the list of products that will be included under the 0-for-0 tariff arrangement, among them some agricultural products,” CEEV president Marzia Varvaglione said in a statement. “We truly believe the trade of wine is of great benefit for both EU and U.S. companies.”

Chris Swonger, CEO of the U.S. Distilled Spirits Council, similarly backed a zero-zero trade agreement for alcohol products.

“We are optimistic that in the days ahead, this positive meeting and agreement will lead to a return to zero-for-zero tariffs for U.S. and EU spirits products,” he wrote in a separate statement. “For more than 20 years, large and small distilleries across the U.S. have flourished under a tariff-free relationship with the EU, our largest export market. It’s time to get back to toasts, not tariffs.”

Trump is also facing pressure on the subject from a number of top European political allies. France’s Minister of the Economy, Finance, and Industry, Eric Lombard, criticized the initial trade framework for delegating wine and spirits to the secondary negotiations tier.

“This agreement is not complete. There is a base rate of 15%, and exemptions, which are not yet fully detailed. Work continues, with France remaining vigilant to protect our industries as much as possible,” he explained.

CEEV estimates that the 10% tariff rate Trump placed on the EU during his 90-day pause on his original “Liberation Day” tariffs led to a 12% decrease in European wine exports to the U.S. 

Furthermore, CEEV secretary general Dr. Ignacio Sanchez Recarte predicted that the new 15% tariff rate would force some European producers out of the U.S. market entirely, and for those remaining to pass price increases down the supply chain to American consumers.

“While producers may absorb part of the increase to lessen the impact on consumers, this approach is not always feasible or effective,” he wrote.

White House officials declined to comment on the prospects of a tariff carveout for European wine and spirits, but throughout his time in office, Trump’s deep connections to the hospitality industry could favor European producers. CEEV estimates that wine exports to the United States generate more than $20 billion in yearly revenue for American businesses. 

American liquor exports to Europe, which totaled more than $1 billion last year, could also likely suffer from corporate protests if the U.S. and EU do not pursue a zero-zero alcohol deal.

Still, Morningstar analyst Verushka Shetty said that alcohol producers have been able to weather trade disputes in the past, thanks to global demand.

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“Distillers often get caught in the crossfire of trade wars, and leading firms have a proven record of successfully mitigating tariff hikes,” Shetty assessed. “Near-term, we expect a negative impact on margins across our spirits coverage, however, we expect the impact to be limited with pricing actions,” Shetty said, suggesting that firms will have to pass on price increases to consumers in order to shield themselves from cost increases.”