Beginning April 5, every bottle of wine imported into the United States will be more expensive, if the tariffs announced this week by President Donald J. Trump go into effect as planned. All foreign wines face minimum tariffs of 10 percent. And beginning April 9, several nations will be hit with even higher duties. Wines from France, Italy, Germany and Spain face tariffs of 20 percent. Wines from South Africa will be tariffed at 30 percent, and wines from Israel at 17 percent. Wines from Australia, New Zealand, Chile and Argentina all face 10 percent tariffs.
The tariffs are part of Trump’s pledge to rebalance global trade. "For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike," the President said in an announcement from the White House Rose Garden on April 2.
For the wine industry, the tariffs are triggering fear of another blow to a sector already struggling. Foreign wineries, which have already been grappling with higher production costs and declining sales, are debating whether they can swallow some of the costs of the tariffs or whether they need to accept price increases that will make their products less competitive. A third option is to simply seek alternative markets, pulling their wines from American store shelves and restaurant lists.
Members of the Administration have outlined two, somewhat conflicting, goals for the tariffs. Short-term, they hope the duties will force other countries to enter negotiations and lower barriers to American products in return for tariff relief. But they also speak of keeping the tariffs in place long-term, as both a source of revenue and to encourage companies to base operations and build factories in the U.S. The dueling purposes have many company owners uncertain as to how long tariffs will remain in place.
Before the President’s announcement, the Office of the U.S. Trade Representative released a report titled “2025 National Trade Estimate Report on Foreign Trade Barriers” detailing why the Administration believes other nations are treating the U.S. unfairly. The report cites other nations’ tariffs, but also details lengthy lists of “non-tariff barriers,” such as product regulations, labeling laws, intellectual property laws, subsidies, taxes and currency manipulation.
As one example, in the section on the European Union, the report objects to new ingredient labeling laws for wine sold in the E.U. and to the Europeans’ ban on imported wines using traditional terms like ruby, tawny and château, which have specific meanings in European appellations.
The Administration calculated each nation’s tariff rate in a two-part process. First, all nations face a baseline 10 percent rate, even nations like Brazil, which actually imports more from the U.S. than it exports to the U.S., and the uninhabited Heard Island, which exports nothing to America. Then, White House officials divided America’s trade deficit with each country by the total of that country's exports to the U.S. That percentage was then halved. Thus, China faces tariffs of 34 percent, Vietnam 46 percent and the E.U. 20 percent. The idea is that if a nation has a trade surplus with the U.S., it must be due to unfair trade practices.
For foreign wineries and the importers who built their businesses on bringing those wines to the U.S., the tariffs are a painful hurdle after dealing with the past five years of pandemic shutdowns, supply chain snarls, inflation and declining wine sales. The E.U. tariff in particular will put further pressure on the U.S. imported wine segment, for which depletions declined 3.3 percent to just under 65 million cases last year, according to Impact Databank. Italy and France are the two largest imported wine segments in the U.S., and Spain, Germany, and Portugal are also among the top 10. While Trump has yet to follow through on his threat of 200 percent tariffs on European wine, the across-the-board nature of the new tariffs will make them difficult to avoid.
"Obviously compared to 200 percent, it is much more manageable," said Harmon Skurnik, partner at import firm Skurnik Wine & Spirits and a board member at the U.S. Wine Trade Alliance. "Still not good news but not a death knell. Yes, some producers will be willing to work with importers to try and mitigate price increases. At this point we aren’t sure how many."
The French federation of wine and spirits exporters (FEVS) has already forecast that they expect the move to reduce U.S. sales by 20 percent. “We’ve been through this before,” said Laurent Delaunay, president of the Burgundy Wine Board (BIVB). “During his first term, Donald Trump imposed a 25 percent tariff in 2019 on still wines in bottles, as part of the Boeing-Airbus trade dispute. The effect was immediate: Our exports to the U.S. plummeted by 15 percent in volume in 2020, leading to a 22 percent drop in revenue.”
The Administration has argued that foreign companies will pay the cost of the tariffs. But tariffs are collected at customs from importers. Those costs are almost always passed up the supply chain to consumers, effectively functioning as a 20 percent sales tax on the wine. Some producers in countries facing 10 percent tariffs have said they will absorb at least part of the tariff cost, but it’s not clear how many can afford to do so. Some imported wines may simply disappear from the market, unable to attract buyers at higher prices.
Still, a 20 percent tariff rate means most will not walk away from the U.S., but may choose to trim exports instead. “We producers will now have to work together to shoulder the heavy economic burden that will result from the imposition of these tariffs on the U.S. market,” said Giovanni Manetti, co-owner of Italy’s Tenuta di Fontodi winery and current president of the Consorzio Vino Chianti Classico trade group. “We will continue on, though, strong in our conviction that the American consumers who have always loved and enjoyed Chianti Classico will remain loyal to our quality wines and to our unique region that’s present in each of our bottles.”
U.S. wineries did not see a measurable increase in sales when Trump imposed 25 percent tariffs on some E.U. wines during his first Administration. What’s more, the ongoing trade battle with Canada has seen California wineries lose their biggest export market. And they face higher production costs, since most wineries import materials like French oak barrels, glass bottles, corks and labels that are now tariffed.
Many European wineries breathed a sigh of relief that the President’s announcement did not include his threatened 200 percent tariffs on European wines and spirits. But those are not off the table just yet. Trump had threatened them after European Union leaders discussed retaliating for a previous round of tariffs of 25 percent on all steel and aluminum imports.
U.S. Treasury Secretary Scott Bessent has urged other countries not to impose retaliatory levies. “One of the messages that I'd like to get out tonight is everybody sit back, take a deep breath, don't immediately retaliate, let’s see where this goes," Bessent said on CNN. "Because if you retaliate, that's how we get escalation… As long as you don't retaliate, this is the high end of the number.”
But other nations might not listen. On April 4, China’s government announced its own 34 percent tariffs on American goods, as well as new restrictions on American agricultural and technology exports.
The European Union’s leadership, which has promised to respond to the steel tariffs on April 13, is now adding the new 20 percent tariffs to its calculations. French, Italian and German leaders all promised a strong response.
“Let’s be clear-eyed about the immense consequences [of the U.S. tariffs],” said E.U. commission chief Ursula von der Leyen. “The global economy will massively suffer. Uncertainty will spiral and trigger the rise of further protectionism. All businesses, big and small, will suffer from day one, from big uncertainty to the disruption of supply chains, to burdensome bureaucracy. The costs of doing business with the United States will drastically increase. Europe has everything it needs to make it through the storm. We are in this together. If you take on one of us, you take on all of us.”
Skurnik believes consumers will feel the impact soon. "Tariffs are sales taxes, plain and simple, that get passed on to the retailer and consumer," he said. "So they are highly inflationary, meaning you can expect higher prices. Second, for wine lovers in particular, extreme tariffs like 100 or 200 percent would threaten the very ability of us to purchase our favorite European wines like Bordeaux, Burgundy, Brunello, Rioja and more in the future. I don’t think that’s a world any of us wants to live in, let alone all the American job losses in the wine importing industry."
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