US wine shops and importers say Trump's threatened 200% tariff on European wines would kill demand

WASHINGTON: The United States is suddenly looking less bubbly for European wines.

President Donald Trump on Thursday threatened a 200% tariff on European wine, Champagne and spirits if the European Union goes forward with a planned 50% tariff on American whiskey. Wine sellers and importers said a tariff of that size would essentially shut down the European wine business in the US.

“I don't think customers are prepared to pay two to three times more for their favorite wine or Champagne,” Ronnie Sanders, the CEO of Vine Street Imports in Mt. Laurel Township, New Jersey, said.

Jeff Zacharia, president of fine wine retailer Zachys in Port Chester, New York, said 80% of the wine he sells is from Europe. Importers depend on European wines for a big part of their distribution system, he said, and there's not enough US wine to make up for that.

“This is just going to have a major negative impact on the whole US wine industry in all aspects of it, including U.S. wineries,” he said.

Zacharia said there are so many unknowns right now he's stopped buying European wine until the picture becomes clearer.

“It's very hard to make preparations when as a business you don't have a clear path forward,” he said. “Our preparations would be very different if it's 200% compared to 100% compared to 10%.”

Wine and spirits from the 27-nation European Union made up 17% of the total consumed in the US in 2023, according to IWSR, a global data and insight provider specializing in alcohol. Of that 17%, Italy accounted for 7% -- mostly from wine – and French wine, cognac and vodka accounted for 5%.

Overall, the US imports much more alcohol than it exports. The $26.6 billion worth of foreign-produced alcoholic beverages that entered the country in 2022 accounted for 14% percent of all US agricultural imports, according to the US Department of Agriculture. The US exported $3.9 billion worth of beer, wine and distilled spirits that year.

Marten Lodewijks, president of IWSR US, said a 200% tariff would not be unprecedented but import duties of that size tend to be more targeted.

In 2020, China imposed tariffs as high as 218% on Australian wine, which caused exports to plunge by 90%, Lodewijks said. China lifted the tariffs last year, but by then Australia's wine industry had taken a big hit.

Australia's wine trade to China was worth 1.1 billion Australian dollars ($710 million) annually before the tariffs were put in place.

Europe's tax on American whiskey, which was unveiled in response to the Trump administration's steel and aluminum tariffs, is expected to go into effect on April 1. Trump responded Thursday in a social media post.

"If this Tariff is not removed immediately, the US will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER EU REPRESENTED COUNTRIES,” Trump wrote. “This will be great for the Wine and Champagne businesses in the US.”

Trump was incorrect about the Champagne business. Champagne is a legally protected wine that can only come from France's Champagne region. But US winemakers — including Trump Winery, a Virginia winery owned by the president's son Eric Trump — do make sparkling wine.

Reaction from across the Atlantic was swift Thursday.

“We must stop a dangerous escalation that is leading to a global trade war where the first victims will be US citizens who will pay more for products, and with them, farmers,'' Ettore Prandini, president of Italy's Coldiretti agriculture lobby, said.

Italian wine exports to the US – led by prosecco -- have tripled in value over the last 20 years and reached 1.9 billion euros ($2.1 billion) last year. In France, the US market for wines and spirits is worth 4 billion euros ($4.3 billion) annually.

Gabriel Picard, who heads the French Federation of Exporters of Wines and Spirits, said 200% tariffs would be “a hammer blow” for France's alcohol export industry, impacting hundreds of thousands of people.

“Not a single bottle will continue to be expedited if 200% tariffs are applied to our products. All exports to the United States will come to a total, total, halt,” Picard said in an interview with The Associated Press.

French transporter Grain de Sail, which uses sail power to ship wines and other goods across the Atlantic, said Thursday that some winemakers had already cancelled planned shipments of wine to the US because they were anticipating tariffs even before Trump's announcement.

“It has more or less frozen exports. There's no point even hoping to send wine to the United States under these conditions,” said Jacques Barreau, the firm's co-founder.

Some US wine stores saw an opportunity Thursday. In Washington, the wine bar Cork announced a tariff sale, encouraging regulars to come stock up on their favourite wines while they're still affordable.

Others wondered aloud whether Trump would really go through with a 200% tariff.

“It changes by the hour now, right?" Mark O'Callaghan, the founder of Exit 9 Wine & Liquor Warehouse in Clifton Park, New York, said. European wines make up around 35% of sales at his store, he said.

Others seemed to want to stay out of the fray. Total Wine, which operates 279 stores in 29 US states, didn't respond to a request for comment Thursday. Southern Glazer's Wine & Spirits, one of the country's largest alcohol distributors, also didn't respond to a message seeking comment.