Quick Take:
Wine industry leaders warned that current 15% EU wine tariffs pose an existential threat to America’s wine market, which sells $24 billion of European wine and supports hundreds of thousands of jobs.
Wine industry leaders from across the country, including Mike Osborn, CEO of Oregon’s Willamette Valley Vineyards, are warning that the entire American wine ecosystem faces an existential threat if current trade policies continue.
That was the consensus at a July 30 virtual roundtable with experts, including Osborn.
On July 28, President Donald Trump announced a trade deal with the European Union which will eliminate EU tariffs on U.S. industrial goods including autos and auto parts, pharmaceuticals, and semiconductors.
Wine was not part of that deal, and the stakes are enormous.
Ben Aneff, who is president of the U.S. Wine Trade Alliance and a managing partner of Tribeca Wine Merchants in New York City, said during the roundtable that the country is “at a pivotal moment” in trade negotiations between the United States and the European Union.
“Right now, while a broader framework is taking shape, many sectors, including wine, remain unresolved, and what’s on the table now is whether wine will be included in a zero-for-zero agreement or some other type of exclusion from the current 15% tariffs for us preserving free trade for one of the most culturally and economically vital categories of trans-Atlantic commerce, is incredibly important,” he said.
The tariff landscape is changing rapidly, sometimes by the day and hour. Before Aug. 1, tariffs on European wine and spirits entering the U.S. were set at 10%, but the rate was set to increase on Aug. 1. On July 31, however, the White House announced a seven-day delay of the increased tariff, which would place the start of the higher tariffs on Aug. 7. There was no reason given for the seven-day delay.
The most recent statement released by the European Commission indicates that the talks ended with a “single 15% tariff rate for the vast majority of EU exports.” This statement specifically mentioned “zero-for-zero tariffs” on many industrial goods and chemicals, steel and aluminum, and certain agricultural products. It did not mention wine or spirits.
Industry leaders within the wine and spirits sector are pushing for a “zero-for-zero” agreement that would eliminate tariffs on wine between the U.S. and the EU, arguing it would benefit American businesses while preserving consumer choice and supporting the hospitality industry, which depends on wide-ranging wine selections.
U.S. consumers buy $24 billion of wine from Europe each year, while European consumers buy only $5.3 billion of wine from the U.S.
That $19 billion difference is “critical to hundreds of thousands of American jobs across the 6,000 wine importers and distributors, the 47,500 wine retailers like myself, and the innumerable restaurants across our country that absolutely depend on this,” Aneff said.
But tariffs combined with a weakening dollar have created price increases of 25% to 30%, forcing distributors to cut staff and threatening the three-tier system — producers, wholesalers and retailers — that all wineries depend on to get their wines to consumers.
Tariffs affect all three tiers. The increased costs are passed on at each tier, ultimately to consumers who pay higher prices on wine, at stores and at restaurants.
“Tariffs disrupt the entire system,” Aneff said. “They hurt small businesses. They raise prices for consumers, and they even shrink our own exports.”
Local retailer sees mixed effects from wine tariffs
Steven Baker, who has owned and operated the retail shop Authentica Wines in Eugene since 2008, reports seeing relatively modest price increases so far, but he is hearing anxiety from customers and others in the industry about the potential for price hikes.
At Authentica Wines, Baker sells wines from Europe, Oregon, Washington, and California. He said recent container shipments have shown price increases of roughly 90 cents on a $10 bottle of wine.
He said he has noticed “some softening” of his business, but nothing too worrisome yet. Some suppliers are offering significant deals as they rush to clear inventory ahead of potentially steep tariffs, and Baker has been taking advantage of these deals.
“I’ve seen some really quite good values come across my desk,” he said.
Baker also said, however, that 30% to 35% of his inventory would no longer be a good value for his customers if it was at a higher price point.
His overall impression is that people are not spending money as freely due to an air of uncertainty.
“People are just holding on to their money a little more,” Baker said.
‘Unfair’ competition for Oregon wineries
Osborn, of Willamette Valley Vineyards, said tariffs create an unfair competitive disadvantage for Oregon wines. If European wines become too expensive due to tariffs, consumers won’t try the benchmarks needed to appreciate Oregon’s quality — like comparing Oregon pinot noir to Burgundy or Oregon rieslings to German wines — making it harder for domestic producers to demonstrate they can compete at world-class levels.
Harry Root, one of the roundtable panelists, owns Grassroots Wine in South Carolina. He said he paid $175,000 in tariffs this year alone on a business that netted $350,000 in profit last year.
“It’s extraordinarily consequential,” Root said. “We’re going to continue to raise our prices as new imported wines come in, and we’re going to hope that the market absorbs it. But the reality is, demand will go down.”
Root said Grassroots Wine has “already implemented austerity” and has had employees leave the business who are not being replaced.
“As long as these tariffs are in effect, our growth is going to be greatly diminished,” he said.
Legislators fight back
On July 29, Oregon Sen. Ron Wyden announced he introduced legislation along with a group of other bipartisan senators that would exempt United States–owned small businesses from tariffs imposed on Canada.
“Trump’s Canada tariffs don’t make sense for ANYONE, but especially not for American small businesses,” said Wyden. Taxes on products from Canada means small businesses in America will pay more for the inputs they use to make things here in the United States – meaning prices will go up, jobs will be lost and small companies will shut down.” The wine industry imports glass from Canada for its bottles, for instance.
The legislation is called the Creating Access to Necessary American-Canadian Duty Adjustments (CANADA) Act.
“I heard firsthand from farmers, ranchers and others at my five open-to-all town halls this past weekend in Eastern Oregon as well as in other community conversations just how devastating this Trump tariff uncertainty has been,” Wyden said. “Trump’s zigzagging trade policy is producing real harm in our state, and this legislation would help put a stop to his needless whipsawing of Oregon small businesses trading with Canada.”
The impact on Oregon’s wine industry
With higher prices on European wines, consumers could stock their wine cellars with domestic wines instead, including many Oregon wines that compare favorably with European imports. However, Oregon’s wineries rely on global supply chains for key materials such as French oak barrels, Portuguese corks, wine bottle glass (which is imported to the U.S. from Mexico as well as Canada), and capsules from Spain that protect the corks and the necks of bottles.
Winemaking equipment in general is often imported. Sometimes there are closer-to-home alternatives. In 2021, for instance, Eugene’s King Estate Winery began sourcing screw caps from Canada, rather than France and Chile. But often, such as with French oak barrels, there is no domestic source.
Tariffs increase costs on these commonly used imported goods, leading to higher expenses for Oregon producers.
These higher costs could shrink the industry overall, from wineries reluctant to expand or hire. Cost increases that aren’t absorbed by the wineries or distributors ultimately end up in the prices customers pay.
If distributors and retailers cut back on their portfolios, industry experts worry that small and mid-sized Oregon wineries will lose shelf space and representation.
Baker, from Authentica Wines, said that the relationships he has developed with his suppliers are just as important to the success of his business as the profit margin. He said that many of the people he has consistently done business with have strived to absorb some of the tariffs.
“So it didn’t fall so much on us,” he said. “But at a certain point, that’s not going to be practical. … People are kind of panicked, and they don’t know where it’s going to end up. So everybody’s in a wait-and-watch sort of phase right now.”
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