Opportunity Knocks Amid Wine Tariff Chaos

The wine tariff uncertainty is unbearable, but where some see disaster others see opportunity.

Despite wider economic conditions, the wine industry has managed to keep the party going for years. And now, tariffs are walking in like a baton-wielding gang of cops.

While everyone seems to agree that these taxes are a bad idea, especially in the long term, many are looking to fill the gaps the current and potential levies are creating.

Earlier this month, the Office of the United States Trade Representatives threatened an eye-popping 100-percent tariff on European wines, on top of the 25-percent tariff it slapped on wines from France, Germany, Spain and the UK in October. If it goes through, the 100-percent tariff will encompass all still and sparkling wine produced anywhere in the EU, regardless of the alcohol level or container size. Most industry experts agree that it will essentially double the prices of every bottle of wine, something that not even the most rich and rabid American Euro-enophile will likely be able to shell out for, long-term.

For the most part, the industry is in lockstep against the tariffs. After the initial round of tariffs was announced, several industry organizations, including the Wine Institute and the Distilled Spirits Council of the United States, issued a statement warning that up to 78,600 US jobs could be eliminated.

“If beverage alcohol products remain on the final US list, the EU would certainly respond by keeping US beverage alcohol products off its list, thus inflicting more damage on US companies that export to this critically important market and hampering the export progress that has benefited our sectors and created good-paying jobs across the US,” the groups stated, somewhat breathlessly. The EU has threatened to impose tariffs on imports of US wine, vodka, and rum.

The numbers, thus far, appear to be on their side. Since the EU imposed a retaliatory tariff on American whiskey last summer, exports declined 19 percent. And since China put a retaliatory 54 percent tariff on US wine imports, trade between the countries has declined 57 percent.

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By Kathleen Willcox | Wine-Searcher