Wine Woes as President Trump’s Tariffs Loom

Trade & Tariffs Impact - The U S could impose a 30% tariff on imported wine from the European Union if no deal is struck by August 1 [2] - A 20% tariff could significantly impact the wine industry, where net profits might only be 5% to 10% [3] - Tariffs could lead to higher prices for consumers, potentially making a $20 wine cost $25 [4] - Major domestic wine producing organizations are against tariffs on imported wine because their domestic growers rely on healthy wine distributors for access to market [8] - Some domestic producers need protection from multinational companies bringing in cheap, subsidized imports [9] Market Dynamics & Consumption - In 2023, the U S consumed just under 900 million gallons of wine, valued at over $107 billion, with more than 1/3 shipped from abroad [7] - Distributors and importers derive about 75% of their revenue from imported wine [8] - California wineries, which produce nearly 90% of U S wine, had over 500,000 excess tons of grapes last year, with 77 million gallons of wine in storage [13] Unfair Trade Practices - The European Union spends over 2 billion annually in EU and member state money propping up their wine sector, including subsidies and market promotion [12] - 24 million gallons of bulk wine are poured into California at super low prices, undercutting California grape growers [16] Potential Economic Consequences - American businesses make almost $23 billion from the sale of European wines in the United States, despite importing about $5.3 billion worth of wine from the European Union [21] - Tariffs could lead to contraction in the wine business, potentially causing American businesses to close and fire employees [22]