It is not clear who will benefit if President Trump follows his threat from the European Union to impose 200% tariffs on all wine and alcoholic beverages, but that is certainly not American consumers.
The tariff warning was retaliated by Trump on social media on Thursday, retaliating a 50% tariff on American whiskey and several other products announced by the European Union.
In his post, Trump said tariffs are “great for the US wine and champagne business,” but American wine producers don't necessarily see them that way.
“On the surface, it may seem like a boon, but looking down, you'll notice that it's really damaging our industry when you don't really need it.”
For most wine producers, sales rely on the interconnected web of small and medium-sized businesses that also rely on sales of European wines (distributors, retailers, and restaurateurs within them).
“These are the best wines that are popular,” said Chris Leon, owner of Leon & Son, a wine retailer in Brooklyn, New York. You're not only hurting European wine, you're hurting the possibility that Americans might buy American wine. ”
The American wine industry is already experiencing difficulties. Sales are declining. The winery has been closed, and public health advocates suggest that alcohol consumption was unhealthy and that climate change has caused catastrophic fires, spring frosts and droughts. Meanwhile, the tariffs Trump has imposed on Canadian and Mexican goods have already affected American producers like the frog leap that relies on those countries' export markets.
“Ontario was our biggest trading partner,” Williams said. “They canceled all orders, including bottles that were already specially labeled for the state. We were all waiting for the next natural disaster. I think this is an unnatural disaster.”
Some companies, like Demeine Estates, a St. Helena, California-based importer, have sought to predict the arrival of tariffs by stockpiling certain European wines before additional costs.
“It doubled in some cases, but in some cases it increased by 20%, but in some cases it was conservative,” said Philana Bouvier, president of Demeine. “You can't do it for everything, because you stay in stock. You need to predict correctly, and time will know if we've done it.”
Some large wine businesses seem less worried than most people. Champagne producer Louis Lauder has spent 40 years making wines that shine in the United States at Roederer Estate, based in Mendocino County, California. Over the past decade, Roederer has diversified his portfolio even further by purchasing well-known California producers such as Merry Edwards Winery in Sonoma County and Diamond Creek Vineyards in Napa Valley.
“We are pleased to announce that we are committed to providing a range of services and services to providing services that will help us to ensure that we are committed to providing services that will help us to ensure that we are committed to providing services that will help us to ensure that we are committed to providing services that will help us to implement our services,” said Guillaume Fouilleron, president and CEO of Roederer USA.
However, Roederer has two advantages: It owns Maisons Marques & Domaines, the American distribution division, and has the financial strength of the company to survive the long-term disruption of the global wine business.
Small businesses are far more vulnerable.
“We are accused of the world of wine traders,” said Ben Anjeff, managing partner of New York City's Tribeca wine merchants and president of the US Wine Trade Aliens who works to ensure a free trade environment for wine. “We cannot overstate the amount of restaurants that rely on the revenue generated from these products.”
It's hard to imagine a trattoria without Italian wines selling New Zealand's Sauvignon Blanc or a Spanish restaurant. But many restaurants are going to significantly increase prices with European wine.
During his first term in 2019, Trump imposed a 25% tariff on certain European foods and drinks. This posed a major challenge to the US wine business until the rates were lifted in 2021 by President Joseph R. Biden Jr.
“We stepped in,” said Doug Polaner, who runs the selection of importer and distributor Polaner in Mount Kisco, New York with his wife Tina. It's not a starter. For now, we need to suspend shipping coming from Europe and figure out what will happen. ”
Of particular concern are wine containers already in transit, so-called “water products.” It's fine if you arrive before the duties are imposed, but if you arrive after the duties have begun, the importer will face a large fee.
Jeff Kellogg of Kellogg Selection said there was a container of wine imported and domestic wine to Virginia and Washington, DC, and was scheduled to be loaded in France, but on Thursday he received a message from the shipper saying the package would be a week late and the orderer would have the opportunity to consider the options.
“I might stop buying European wine until it's clear,” Kellogg said. He added that he will be forced to raise prices for American wine.
“It was for our business,” he said. “If we can't sell European wine anymore, we're dropping salespeople, drivers, etc. It's not in the same business.”
