Some bottles of wine could double in price under new Trump tariffs, wine industry says
Industry experts warned in a hearing this week that the price of wine could double, or bottles could disappear from the shelves altogether under a proposed 100% tariff on European wine.
The Trump administration’s proposed tariff comes in retaliation to France’s Digital Services Tax, that would apply to revenue’s from American tech companies such as Google, Amazon and Facebook. The tariff would add to an already existing 25% tariff on wine and other European products implemented last year in retaliation to a dispute over the European airline manufacturer Airbus.
William Tomaszewski, general counsel for the online retailer Wine.com, told McClatchy News 40% of its sales come from European wines alone. If the tariff goes into effect, he said the company simply will not be able to cover the cost.
“A $20 bottle of wine, if this tariff is 100%, that means we will have to sell it at $40,” he said. “Who wants to pay $40 for a $20 bottle of wine?”
Wine & Spirits Wholesalers of America said their members are already suffering from retaliatory tariffs by China and the European Union on American distilled spirits and wines. WSWA President and CEO Michelle Korsmo said in a statement Tuesday the new tariff could lead to a total of 17,000 lost jobs and a cost to the American economy of more than $2 billion.
North Carolina wine importer Jean-Philippe Bourgeois told the Citizen-Times that the wine industry would be “heavily hammered” if the tariffs go into effect.
“It would be an absolute calamity, really,” he said.
Will the tariffs help American winemakers?
Gary Hufbauer, non-resident senior fellow at the Peterson Institute for International Economics, said people may shift to Californian wines and wines imported from other countries such as Chile, New Zealand and Australia. But he also told McClatchy News businesses will cut back imports and domestic prices will go up.
“Along the way some jobs are going to be lost, and consumers of those products will not be happy,” he said.
Tomaszewski said part of the experience of drinking wine is knowing where it came from, what type of grape it was and other details.
“It has to do with people’s taste buds actually,” he said. “If you don’t like lamb, or if you love lamb or chicken and you can’t get ahold of it, it doesn’t mean you’re going to eat something else.”
That is why Tomaszewski said the tariff will have a waterfall effect, where people will either pay the price or stop buying the wine altogether.
“Forty percent of our business is going to be affected by our 100% tariff,” he said. “That is going to be devastating to the whole alcohol industry.”
It is unclear when the tariffs would go into effect. The U.S. Trade Representative is collecting public comments on the issue until Jan. 13.
This story was originally published January 10, 2020 at 2:30 PM.