Wine Tariffs Uncorked: How Consumers Will Foot Part of Trump’s Bill

A study from Duke University’s Department of Economics indicates that consumers in the U.S. paid significantly more than the actual cost of tariffs on European wines during a trade dispute from 2019 to 2021. This finding raises concerns as new tariffs are being introduced globally, potentially increasing prices for American consumers.

The analysis revealed that, despite a reduction in prices by foreign wine producers in response to the 25% tariff on wines with 14% alcohol content or below, U.S. consumers did not benefit from these savings. Instead, the prices charged by U.S. importers to distributors rose by about 5.4%, which meant consumers ultimately paid an average of $1.59 more per bottle, surpassing the $1.19 tariff collected at the border. Duke Associate Professor Felix Tintelnot noted that the rise in consumer prices outpaced tariff revenue, indicating that consumers bore most of the financial burden.

The research, which analyzed public data and information from a major wine importer and was published by the National Bureau of Economic Research, pointed out that not only consumers were affected, but also the importers faced squeezed margins. Though the tariffs aimed to protect domestic producers and generate revenue, they fell short of expectations as many wines remained unaffected, creating a control group for comparison.

Furthermore, tariffs led to changes in product labeling, with some wines adjusting their classifications to avoid the duties. Tintelnot remarked that price increases were slow to reach consumers and remained elevated even after tariffs were lifted.

Recent reports from Goldman Sachs align with these findings, stating that U.S. consumers are expected to carry the brunt of Trump’s renewed tariffs, accounting for 55% of the total costs, while businesses and foreign exporters shoulder less of the burden.

For more detailed insights, refer to the full study available here and a relevant report from Goldman Sachs here.

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!