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California winemakers are reacting with concern and cautious optimism to former President Donald Trump’s proposal to impose a 200% tariff on wine, Champagne, and other alcoholic imports from the European Union (EU). While some believe the move could revive demand for American wines, others warn it could disrupt an already fragile industry.
Industry Concerns
Many small and mid-sized wineries worry that tariffs will trigger retaliatory measures, further complicating trade. John Williams, founder of Frog’s Leap in Napa Valley, emphasized the global interconnectivity of the industry, warning that tariffs could harm distributors and disrupt business for winemakers who sell abroad.
Former Congressman John Duarte, who operates a grape vine nursery, also cautioned that large alcohol corporations may benefit more than smaller producers due to customs regulations allowing import-export duty refunds. He fears that tariffs could tilt the playing field in favor of multinational wine companies.
Potential Upside for Domestic Wineries
Despite the concerns, some in the industry see a silver lining. Bruce Lundquist, co-founder of Rack & Riddle, the largest U.S. sparkling wine producer, believes the tariff could boost demand for domestic sparkling wines by making imported Champagne prohibitively expensive.
France exported 27 million bottles of Champagne to the U.S. in 2023. A steep price increase due to tariffs could shift consumer focus to American-made alternatives.
Escalating Trade Tensions
The proposed tariff follows a 25% tariff on EU steel and aluminum imposed by Trump. The EU is set to retaliate with a 50% tax on American whiskey in April, raising concerns of a wider trade war affecting multiple industries.
While some California winemakers welcome the opportunity to expand their market share, others fear economic uncertainty and supply chain disruptions. As trade tensions escalate, the wine industry remains divided on whether the tariffs will help or hinder U.S. producers.
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