The United States is suddenly looking less attractive to European wines.
President Donald Trump threatened Thursday to impose a 200% tariff on European wine, champagne, and spirits if the European Union goes ahead with the planned 50% tariff on American whiskey. Wine sellers and importers said a tariff of that magnitude would virtually paralyze the European wine business in the United States.
“I don’t think customers are willing to pay two to three times more for their favorite wine or champagne,” said Ronnie Sanders, CEO of Vine Street Imports in Mt. Laurel Township, New Jersey.
Jeff Zacharia, president of wine retailer Zachys in Port Chester, New York, said 80 percent of the wine he sells comes from Europe. Importers rely on European wines for a large part of their distribution system, he said, and there’s not enough American wine to offset that.
“This is just going to have a huge negative impact on the entire American wine industry in all aspects of it, including American wineries,” he said.
Zacharia said there are so many unknowns right now that he’s stopped buying European wine until the picture becomes clearer.
“It’s very difficult to prepare if you don’t have a clear path forward as a company,” he said. “Our preparation would be very different if it’s 200% compared to 100% compared to 10%.”
Wine and spirits from the 27 countries of the European Union made up 17% of total U.S. consumption in 2023, according to IWSR, a global data and insights provider specializing in alcohol. Of that 17%, Italy accounted for 7% — mostly wine — and French wine, cognac and vodka accounted for 5%.
Overall, the U.S. imports far more alcohol than it exports. The $26.6 billion worth of foreign-produced alcoholic beverages that entered the country in 2022 represented 14% percent of all U.S. agricultural imports, according to the U.S. Department of Agriculture. The U.S. exported $3.9 billion worth of beer, wine and distilled spirits that year.
In 2020, China imposed tariffs of up to 218% on Australian wine, causing a 90% drop in exports, according to Lodewijks. China lifted the tariffs last year, but by then the Australian wine industry had already suffered a severe blow. Australian wine trade with China amounted to A$1.1 billion (US$710 million) annually before the tariffs were implemented.
The European tax on American whiskey, announced in response to the Trump administration’s tariffs on steel and aluminum, is expected to take effect on April 1. Trump responded in a social media post on Thursday.
“If this tariff is not removed immediately, the U.S. will shortly impose a 200% tariff on all wines, champagne, and spirits from France and other countries represented by the EU,” Trump wrote. “This will be very beneficial to the wine and champagne industry in the U.S.”
Trump was wrong about the champagne business. Champagne is a legally protected wine that can only come from the Champagne region of France. However, American wine producers, 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 on Thursday.
“We must stop a dangerous escalation that is leading to a global trade war where the first victims will be American citizens, who will pay more for products, and with them, farmers,” said Ettore Prandini, president of the Italian agricultural lobby group Coldiretti.
Italian wine exports to the US, led by Prosecco, have tripled in value over the past 20 years and reached €1.9 billion ($2.1 billion) last year. In France, the US wine and spirits market reaches €4 billion ($4.3 billion) annually.
Gabriel Picard, director of the French Federation of Wine and Spirits Exporters, noted that the 200% tariffs would be a severe blow to the French alcohol export industry, affecting hundreds of thousands of people.
“Not a single bottle will continue to be exported if 200% tariffs are applied to our products. All exports to the United States will come to a complete halt,” Picard said in an interview with The Associated Press.