How Are Tariffs Impacting the Industry?
On April 6th, 2025, a boutique distributor based in South Florida unveiled its game plan to financially survive the U.S. tariffs being implemented around the world. The plan actually started back in October 2024, when the company proactively imported 15 containers of wine from Europe, most of which have already arrived and are exempt from tariffs.
Fast forward to today.
The company suspended additional shipments in March due to the threat of 200% tariffs, which have been described as potentially “devastating” and a '“death knell” for the American wine industry. That triple digit hammer has not been dropped.
A tariff is a tax placed on goods imported from another country. It is used to protect domestic industries, generate revenue, and as leverage in trade negotiations (like what we see now).
Wine Spectator’s Mitch Frank simplifies it: “The new tariffs will effectively function as a 10 percent sales tax on your wine. When the wine arrives in U.S. ports, the importers must pay the tariff then to get the wine out of customs. So a bottle they paid the winery $30 for now costs them $33. As the wine goes through a wholesaler and then a retailer or restaurant, they all add their markups—that’s not unfair, they’re running a business after all. But it means that the wine that you used to pay $60 for, now costs you $66.”
There is now a 90-day pause on most tariffs to allow for nations to negotiate with the U.S. government and strike deals that would reduce trade imbalances. A 10% baseline tariff on foreign wines remains in place.
Who wins? According to experts, no one for now.
While tariffs on European wines were expected to benefit U.S. winemakers by reducing foreign competition, many American producers are instead facing rising costs and significant challenges:
Rising cost of goods - Many U.S. winemakers rely on imported goods like corks (mainly from Portugal), French oak barrels, and glass bottles (often from China and Mexico). And while people could pivot to screw tops, those are often made of aluminium, subject to a 25% tariff currently
Limited pricing flexibility - Even though imported wines are more expensive, U.S. winemakers can’t raise prices freely so consumers might turn to beer, spirits, or stop drinking wine altogether
Distributor disruption - U.S. wineries depend on distributors who also import European wine. The boutique distributor mentioned earlier is reducing its margins, and asking its European producers to do the same
Some see potential long-term gains if distributors shift focus to U.S. wines, but this would require time and major adjustments. Plus, who wants less Barbaresco?!