The wine industry in the United States is on edge following a recent announcement by President Donald Trump, who has threatened to impose a substantial 200% tariff on European alcoholic imports, including wine, Champagne, and spirits. This bold tariff threat comes as a reaction to the European Union’s plan to implement a 50% tariff on American whiskey. Wine importers and sellers warn that such an astronomical tariff could drastically disrupt the European wine market in the U.S.
Ronnie Sanders, CEO of Vine Street Imports in New Jersey, expressed skepticism about consumers’ willingness to pay inflated prices for European wines and champagnes. Similarly, Jeff Zacharia, president of Zachys, a fine wine retailer in New York, highlighted the heavy reliance on European wines, which make up a significant portion of the market for importers in the U.S. He warned of a potentially severe impact across the wine industry, stressing that American wineries could also face repercussions due to the interconnected nature of the global wine market.
Currently, a climate of uncertainty reigns, causing Zacharia and others to halt European wine purchases until the situation becomes clearer. The level of tariffs imposed will dictate their future strategies, with the potential differences between 10%, 100%, or 200% tariffs creating vastly different business scenarios.
As of 2023, data from IWSR, an industry research firm, shows that 17% of alcohol consumed in the U.S. comes from the 27-nation European Union, with Italy and France being prominent exporters. The U.S. typically imports significantly more alcoholic beverages than it exports, with foreign imports accounting for 14% of the country’s total agricultural imports in 2022 according to U.S. Department of Agriculture statistics.
Marten Lodewijks, president of IWSR U.S., noted that while a tariff of 200% would be rare, such measures have been witnessed in specific instances before. For example, China once imposed heavy tariffs on Australian wine, resulting in a collapse of exports by 90% before they were lifted.
The European Union’s proposed whiskey tariffs are a countermeasure to tariffs on steel and aluminum put in place by the U.S. administration. Trump’s threatening response was shared publicly on social media, promising a retaliatory 200% tariff on all European alcoholic imports should the EU proceed with its plans.
This stance has stirred concern in European markets. Ettore Prandini of Italy’s Coldiretti agriculture lobby warned of a looming global trade war that could affect U.S. consumers and farmers alike. Italy’s wine export market to the U.S. is substantial, having tripled over two decades.
Gabriel Picard, heading the French Federation of Exporters of Wines and Spirits, described the prospective 200% tariffs as devastating, potentially halting exports completely and impacting numerous individuals employed in the wine industry. Grain de Sail, a sailing-transporter company, reported cancellations of wine shipments in anticipation of tariff escalation.
In the U.S., some wine retailers like Cork wine bar in Washington saw this as a chance to encourage sales by promoting existing stock before prices potentially soar. Contrarily, others like Mark O’Callaghan from a New York liquor store, expressed uncertainty and wondered about the real possibility of such tariffs being fully enacted. Major distributors, meanwhile, have remained silent on the issue.
