U.S. Wine Businesses Brace for Tariffs: Impacts on Domestic Wineries Unfold

Last month, President Donald Trump made headlines by threatening to impose 200% tariffs on all wines imported from the European Union. However, after a period of uncertainty, he later adjusted this to a 20% tariff on EU goods, including wine. Although this percentage is significantly lower than the initial threat, many in the U.S. wine industry are preparing for the financial repercussions.

Damien Carney, who owns the Avinage wine shop in Petaluma, California, expressed concern as his shop, located in the heart of Sonoma wine country, heavily relies on imported wines—75% of his inventory consists of European products. He stated that the impending tariffs may force him to either raise prices accordingly or completely revamp his business strategy. Carney worries that even if he were to stock more domestic wines, his customers would not be satisfied, particularly those who desire specific French wines that cannot be replicated with local alternatives.

The timing of these tariffs couldn’t be worse for the wine industry, which is already facing challenges. A recent report from Silicon Valley Bank highlighted declining wine sales, citing a lack of interest among younger consumers and intensified competition from other alcoholic beverages, such as hard seltzers.

Ben Aneff, the head of the U.S. Wine Trade Alliance, highlighted the broader impact these tariffs could have, stressing that U.S. businesses generate about $25 billion in revenue from imported wines worth roughly $4.5 billion. The tariffs will particularly hit restaurants and retailers who depend on imported wines for better profit margins.

Surprisingly, domestic wineries are also feeling the strain. John Benedetti, who owns the Sante Arcangeli winery in California’s Santa Cruz Mountains, mentioned that he is already facing high tariffs on materials sourced from other countries, including bottles from China and barrels from France. He noted that recent tariffs on Canadian products have led to a ban on U.S. wine imports in several Canadian provinces, causing him to lose a significant opportunity to enter the Canadian market after years of effort.

The situation highlights the interconnectedness of the wine industry, where tariffs affect not just foreign imports but also domestic producers and their supply chains, further complicating an already challenging economic landscape.

About the Author: Chris Lehoux

Meet Chris Lehoux, an experienced wine connoisseur and dedicated blogger with a deep passion for all things wine-related. With years of expertise in the industry, Chris shares insightful wine reviews, valuable wine tasting tips, expert pairing advice, and captivating tales of vineyard visits. Join Chris on a journey through the world of wine, where every sip is an adventure waiting to be savored!