The United States is facing uncertainty regarding European wine imports. President Donald Trump recently mentioned the possibility of imposing a 200% tariff on European wine, Champagne, and spirits if the European Union proceeds with its planned 50% tariff on American whiskey. Wine sellers and importers have expressed concerns, stating that such a hefty tariff would essentially cripple the European wine industry in the US.
Ronnie Sanders, CEO of Vine Street Imports in Mt. Laurel Township, New Jersey, shared his doubts about customers being willing to pay two to three times the current price for their favorite wine or Champagne. Jeff Zacharia, president of fine wine retailer Zachys in Port Chester, New York, mentioned that 80% of the wines he sells come from Europe. He emphasized the reliance of importers on European wines for a significant portion of their distribution network, noting that there isn’t enough US wine to compensate for this potential loss.
The looming threat of increased tariffs is expected to have a detrimental effect on the entire US wine industry, including domestic wineries, as per Zacharia. With many uncertainties surrounding the situation, Zacharia revealed that his business has halted purchases of European wine until a clearer path forward emerges.
In 2023, wine and spirits from the 27-nation European Union contributed to 17% of the total alcohol consumption in the US. Italy accounted for 7% of this share, predominantly in wine, while French wine, cognac, and vodka made up 5%. The US imports more alcohol than it exports, with foreign-produced alcoholic beverages totaling $26.6 billion in 2022, representing 14% of all US agricultural imports.
Marten Lodewijks, president of IWSR U.S., noted that while a 200% tariff is not unheard of, such high import duties are typically more targeted. He referenced China’s imposition of tariffs up to 218% on Australian wine in 2020, resulting in a significant decline in exports. Lodewijks highlighted the potential impact of the European tax on American whiskey, scheduled to take effect on April 1, as a response to previous US tariffs on steel and aluminum.
President Trump’s recent social media post threatened a 200% tariff on all wines, Champagnes, and alcoholic products from France and other EU countries if the current tariffs are not lifted promptly. Trump incorrectly implied that this move would benefit the wine and Champagne businesses in the US. However, it’s important to note that Champagne is a protected designation that originates exclusively from France’s Champagne region.
The reaction from Europe was swift, with concerns raised about the escalating trade tensions leading to a global trade war that would ultimately impact US citizens and farmers.
The Coldiretti agriculture lobby in Italy reported that Italian wine exports to the U.S., especially prosecco, have tripled in value over the past two decades, reaching 1.9 billion euros ($2.1 billion) last year. Meanwhile, in France, the U.S. market for wines and spirits is worth 4 billion euros ($4.3 billion) annually. Gabriel Picard, head of the French Federation of Exporters of Wines and Spirits, expressed concern over the potential impact of 200% tariffs on France’s alcohol export industry, warning that it would be a severe blow affecting hundreds of thousands of people. He stated that if such tariffs were imposed, all exports to the United States would come to a complete halt. Some French winemakers had already canceled planned shipments to the U.S. in anticipation of tariffs before President Trump’s announcement. This situation has led to a freezing of exports for some, with one transporter noting the futility of sending wine to the U.S. under these conditions. Amidst the uncertainty, some U.S. wine stores have taken advantage of the situation by offering tariff sales to customers, while others are unsure about the potential impact of the proposed tariffs. European wines constitute a significant portion of sales for some store owners, while others have chosen not to comment or engage in the discussion.
