Wine consumers and the wine industry are increasingly becoming collateral damage in President Donald Trump’s trade battles with other nations. This morning, the President threatened to levy a 200 percent tariff on “all wines, Champagnes and alcoholic products coming out of France and other E.U. represented countries.” The threatened retaliation was triggered by the European Union’s announcement yesterday that it plans to impose tariffs of 50 percent on American whiskies beginning on April 1. Those duties came in response to Trump’s 25 percent levies on steel and aluminum, which went into effect earlier this week.
For wine consumers who enjoy European wines, the impact would be severe. Importers who bring those wines to the U.S. would need to pay the 200 percent tariffs and would likely pass on most, if not all, of that cost to American consumers, effectively creating a 200 percent tax on European wine.
U.S. Wine Disappears from Canadian Shelves
Meanwhile, American wineries have watched sales evaporate in their leading export market—Canada. On March 4, Trump imposed 25 percent tariffs on nearly all Canadian and Mexican imports. The next day he paused the duties on auto parts for one month and the day after that he said he would allow products that are traded under the rules of the U.S.-Mexico-Canada Agreement (USMCA), the trade pact he signed in his first term, to avoid the stiff 25 percent tariffs for at least one month.
But an estimated 40 to 50 percent of imports from Canada still face the 25 percent levies. Canadian Prime Minister Justin Trudeau retaliated with a 25 percent tariff on $20.5 billion dollars’ worth of American goods, which will grow to add roughly another $85 billion of products in three weeks. American wines were included in the first round.
What’s more, governments in all 10 of Canada’s provinces have instructed their liquor boards to remove alcoholic beverages from the United States from their shelves and to prohibit the wholesale of those products to restaurants, bars and stores. In stores throughout country, signs have appeared on shelves that used to display California Cabernet and Kentucky Bourbon urging customers to buy local products instead.
“Canada is the single most important export market for U.S. wines, with retail sales in excess of $1.1 billion annually,” said Robert P. Koch, president and CEO of Wine Institute, in a statement. “Wine is one of the U.S.’ most highly value-added agricultural exports, so any loss of access to the Canadian market will damage the entire U.S. wine sector. Our wineries have spent decades building market share and brand loyalty across Canada.”
Wine Falls Victim to Steel
Across the Atlantic, the battle with the E.U. comes down to metal. The Trump Administration implemented 25 percent metal imports from every country that sells steel and aluminum to the U.S. The E.U. imposed 50 percent levies on up to $28 billion worth of American goods, including Bourbon, boats and motorcycles.
It was the whiskey that got the President’s attention. In a post on Truth Social, Trump stated that the E.U., “Put a nasty 50 percent tariff on whisky. If this Tariff is not removed immediately, the U.S. will shortly place a 200 percent Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.”
In a statement explaining the tariffs on American goods, E.U. President Ursula von der Leyden said, “We deeply regret this measure. Tariffs are taxes. They are bad for business, and worse for consumers. They are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices will go up. Nobody needs that—on both sides, neither in the European Union nor in the United States.”
The E.U. tariffs would return American whiskey producers to the challenges faced during the first Trump administration, when tariffs caused whiskey exports to fall by 20 percent—or $112 million—between 2018 and 2021.
About a fifth of wine exports from the E.U. go to the United States, based on data from Eurostat, worth more than €5 billion in 2024. Italy, France and Spain would be hit hardest by the measure.
What’s the Impact for American Wine Companies and Restaurants?
Before the new wine tariffs were announced, the U.S. Wine Trade Alliance (USWTA)—a coalition of industry players from wineries, wholesalers, restaurants and retailers all advocating against tariffs—held a roundtable on March 12 focused on the potential impacts of tariffs on the U.S. wine industry. Restaurateur Andy Fortgang, co-owner and wine director at Oregon’s Le Pigeon & Canard restaurants, explained how imported wine is a key source of revenue for restaurants, especially with food and labor costs so high right now.
“We were just looking back at the last year as we were doing our taxes, and among the three restaurants that I share ownership in, one had a profit margin of four percent, one six percent, and one nine percent,” said Fortgang. “When you think about how much of that profit margin is coming from beverage versus from food, we see how squeezing that becomes really difficult and makes the tariffs a profit killer.”
For consumers, the tariffs would mean dramatically higher prices on imported wines. But it’s even more likely that many imported wines would simply disappear from the market, unable to attract buyers at triple their normal price. Domestic wineries did not see a measurable increase in sales when 25 percent tariffs were put in place on some E.U. wines during the first Trump Administration.
What’s Next for Wine and Trade?
The E.U. tariffs on American products will not go into effect until April 1. It is not yet known when the Trump Administration would impose tariffs on E.U. wine. Importers, retailers and restaurateurs hope to lobby the Administration to spare their sector.
But further battles loom. The White House has announced it will impose “reciprocal tariffs” on agricultural products from various countries on April 2. It is unclear how large those tariffs would be, which products they will cover and how other nations will respond.
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