Attorney Mike Laszlo, a member of the Clark Hill law firm in Denver, represents a wide range of wine-related clients, including restaurant groups, producers, importers, wholesalers, and retailers. As such, he tries to be philosophical about the near-certain imposition of tariffs — perhaps as high as 20% or 25% — on imported wine and other alcoholic beverages following Donald Trump’s election as US president this month.
But he’s not finding it easy.
“Things are never as bad as they seem, just like they’re never as good as they seem,” says Laszlo. “But there couldn’t be a worse time for new or re-imposed tariffs on the wine business, given what’s going on with the slowdown in demand and the excess of wine out there. It’s scary what could happen over the next 18 to 24 months.”
Laszlo is not the only one who is worried. So are a variety of retailers, importers, wholesalers, and analysts, as the incoming Trump Administration aims to fulfill its campaign promise to force the EU, China, and Mexico (among others) to open its borders to a variety of US products. The president-elect has vowed to erect as high a tariff wall as necessary to force other countries to eliminate restrictions on US imports and has even gone so far as to say tariff revenue would enable his government to reduce US income taxes.
"There couldn’t be a worse time for new or re-imposed tariffs on the wine business, given what’s going on with the slowdown in demand and the excess of wine out there."
Meanwhile, the tariff scenario is playing out against an already troubled international trade situation. The US and China are sparring over a variety of products, and the Biden Administration had already started a lengthy investigation into complaints that China, Mexico, and Chile were selling glass wine bottles at unfairly low prices in the United States. In addition, the 25% tariff on some European wine that was part of the Boeing-Airbus dispute during the first Trump Administration — temporarily lifted in 2021 — is scheduled to resume in 2026.
“The Trump Administration’s economic platform is based on tariffs,” says Michael Kaiser, executive vice president and director of government affairs for the Wine America trade group. “And that means tariffs on alcohol, including wine.”
A possible timeline
Much remains to be seen about the specifics of any Trump wine tariff plan. Broadly, say news reports, the president-elect has promised 10% tariffs on all imported goods, and up to 60% and 100% levies for products from China and Mexico. This could double the price of Mexican beer and tequila; the former includes several of the best-selling brands in the US, while tequila is one of the few bright spots in a slumping US spirits market. The 20-25% figures for wine are based on estimates from those interviewed for this story, given past alcohol tariffs and an analysis of the Trump economic plan. It will likely include EU wine, and may even include wine from other parts of the world.
Mark Ludwikowski, an international trade attorney with Clark Hill, says the proposed Trump tariffs are different from the anti-dumping duties that are part of the glass bottle dispute, as well as the unfair trade practices charges in the Boeing-Airbus matter. Instead, he says, many of the new tariffs would be similar to the Trump-imposed tariffs that came during his first term that were 10% to 25% on thousands of Chinese products, plus steel and aluminum from most countries.
Kaiser says what will happen should become more clear by next summer, when the Trump Administration appoints new trade officials, irons out the details of what promises to be a hugely complex plan, and works with what looks to be a friendly and Republican-majority Congress to enact legislation to make the tariffs permanent.
However, says Kaiser, the president has the authority to impose tariffs with an executive order, and that could happen more quickly — even as soon as he takes office. The Congress would have the power to approve or undo those executive orders, but given the potential GOP majority, the former is more likely.
“I think we’ll see how it impacts the industry in the second half of 2025 and the beginning of 2026,” says Kaiser. “Whatever happens, though, I think we can expect more losses based on what happened last time with the Airbus tariff. There were losses then, but that was tempered by the surge in sales during COVID. This time, there is no surge in sales to cushion the effects.”
Analysts have called the drop in demand for wine since the end of the pandemic almost unprecedented, for both domestic and imported wine.
US wine sales, even measured by dollars in what has become an increasingly premiumised market, have been suffering for several years. Analysts have called the drop in demand for wine since the end of the pandemic almost unprecedented, for both domestic and imported wine.
Michael Correra, a Brooklyn retailer and executive director of New York City’s Metropolitan Package Store Association, says, “Prices are already over the top. A tariff is going to do one of two things: Either push people to canned cocktails, or, more likely — and I’ve already seen this — they’re just going to buy less. Consumers have a budget, and if prices get higher, they’re going to buy less, from four bottles a month to two or three.”
According to importer Bartholomew Broadbent, a $50 bottle of wine could increase to $59-$64 under the new tariffs. If consumers aren’t buying the $50 bottle of wine now, why would anyone think they’d pay more money for it? And how would that lower the cost of living?
Estimating losses
Some estimates say it could cost the US wine industry hundreds of millions of dollars in lost sales, based on what happened during the first tariff. New York City retailer Ben Aneff, the president of the US Wine Trade Alliance, which represents small and independent restaurants, retailers, importers, and wholesalers, didn’t have a firm dollar number, but he says new tariffs could put tens of thousands of jobs in jeopardy. Higher costs from tariffs could also leave thousands of family-owned restaurants and small wholesalers and importers in danger of closing, by raising their costs at a time when margins are already razor thin.
Several people interviewed for this story said there are few importers and wholesalers who can afford to stock up in advance of any tariff. In addition, the slump in demand already has warehouses bursting at the seams with unsold wine. Where would they put new products even if they could afford to buy them?
Wholesaler Harry Root of Grassroots Wine in Charleston, S.C., speaking at a wine trade alliance media event last month, was blunt about the harm new tariffs would do. Many small and independent wholesalers like his were already facing hiring freezes and budget cuts given the current slump, and a tariff would almost certainly push many over the edge. Root said his capital costs would increase at least 15% just to keep the same inventory levels, even though inventory quality would probably decrease since he would have to replace many of the wines that the tariff priced out of his range.
Aneff says his group has been lobbying GOP officials for several years, and he has hopes they understand that wine tariffs aren’t the best way to force the EU to open its markets, particularly where agricultural products are concerned. This is something he says they didn’t entirely comprehend during the Airbus tariff trade dispute.
That’s because the US three-tier system, which regulates alcohol sales, forces importers, and not the foreign wine producer, to pay the tariff. In some states, wholesalers are legally required to pass the cost of the tariff on to the retailer, which means both must pay for it before the product is sold to a consumer. If the consumer doesn’t buy it, as Broadbent notes, each tier of the system has paid for the tariff without getting its money back.
Currently, imports make up about 40% of US wine sales. Whether domestic producers would benefit from tariffs is unclear. Economic theory says consumers will switch to lower-priced domestic products when tariffs raise the price of imports; lettuce is lettuce, after all. So some of that is likely.
But this overlooks two points about wine. First, French or Italian wine doesn’t have an exact substitute in the domestic market, so what would a French wine drinker buy to replace the tariff wines? What would a French restaurant put on its wine list? Second, given premiumisation in California, is there an $8 or $10 domestic Pinot Grigio to replace what would now be a $12 or $15 Italian Pinot Grigio? This is one reason why Wine America and some California winery trade groups oppose new tariffs.
In the end, say those interviewed for this story, they’re hoping for the best and that the Trump Administration understands why wine is different. Because there isn’t much else they can do.
Don't forget to subscribe to our newsletter. Be the first to know and never miss out on important updates.
