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California’s winemakers are reacting with mixed emotions to President Trump’s proposal to impose a 200% tariff on European wine and spirits, a move intended to boost the domestic wine industry but one that could have unintended consequences for small producers.
While some see the tariffs as an opportunity to increase demand for California-made wines, others fear economic disruption, especially as the industry faces declining sales, wildfire damage, and drought-related crop losses.
A Risky Trade War for the Wine Industry
Trump’s tariff proposal is the latest escalation in a growing trade conflict between the U.S. and the European Union. The EU is a major supplier of wine and spirits to the U.S., and tariffs would significantly raise prices for American consumers, impacting retailers, distributors, and restaurants.
Industry veteran John Williams, founder of Napa Valley’s Frog’s Leap Winery, warned that the tariffs could harm wine distributors, which are critical to both domestic and international sales.
“Even though we’re a farming family business, there’s a global link. This is not good for our industry in general.”
Williams also noted that Canada, another key U.S. trade partner, has retaliated by removing American alcohol brands from store shelves, further straining the market.
Who Benefits from the Tariffs?
While Trump framed the tariffs as a win for U.S. wineries, some industry experts argue that large multinational alcohol corporations—which both import and export wine—stand to benefit the most.
Former Congressman John Duarte, who owns a family farm and grapevine nursery, explained that U.S. Customs allows refunds on import duties for companies that also export. This means that large wine corporations could import European wines at higher prices to maximize duty refunds, a strategy smaller wineries cannot afford.
“At first, you want to be thankful that President Trump is standing up for the domestic wine industry. But this 200% tariff gives a giant advantage to global wine companies.”
Duarte supports addressing trade imbalances with the EU but argues that the solution needs to be handled more carefully to avoid hurting small businesses.
An Opportunity for Domestic Sparkling Wines?
Despite concerns, some domestic producers of sparkling wine see a potential upside to the tariffs.
Bruce Lundquist, co-founder of Rack & Riddle, the largest sparkling wine producer in the U.S., believes that a sharp increase in Champagne prices could shift consumer interest toward American-made sparkling wines.
“Nobody wants a trade war… but it would probably boost business for domestically made sparkling wines.”
In 2023, France exported nearly 27 million bottles of Champagne to the U.S., making it the largest foreign supplier. If tariffs triple Champagne prices, it could push consumers toward American alternatives.
The Uncertain Future of U.S.-EU Wine Trade
As Trump’s tariff threat looms, the wine industry remains deeply divided over whether this policy will revitalize domestic production or destabilize global trade relationships.
With wine consumption already declining in the U.S., smaller wineries and independent vineyards fear further economic disruption, while some larger producers see an opportunity to capture new market share.
If enacted, the tariffs could reshape the American wine industry, but whether it strengthens or weakens California’s winemakers remains uncertain.
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