Trump’s tariff plans could drive up US wine prices and hurt demand

US wine sellers are concerned about President Donald Trump's tariffs which are set to take effect later on Wednesday.

The tariffs are anticipated to raise the cost of imported wines and liquors.

Adam Williams, 57, owner of Ansley Wine Merchants in Atlanta, told Reuters in a report that prices on all products will increase due to the Trump Administration's proposed 20% tariff on goods from the European Union. 

This includes customer favorites such as the 2023 vintage Sancerre from France, which currently costs $45.

With the tariff, the price of a bottle of wine could rise beyond what the average customer is willing to pay.

The threat of tariffs on European wine and champagne imports from Trump comes at a time when global demand for the alcoholic beverage is already decreasing.

Retailer concerns and predictions

A statement released by the US National Association of Wine Retailers over the weekend expressed concerns about "significant revenue reductions, layoffs, and business closings." 

The European Union, led by France and Italy, is the biggest exporter of wine to the US French wine and spirits exporters FEVS predict that when tariffs are implemented, sales of French wine and spirits in the US could decrease by at least 20%.

The US trade group, National Association of Wine Retailers, stated that consumers will "rein in their spending" and cut back on "non-essential items like wine" when faced with higher prices due to tariffs.  

The group believes that  any hope for tariffs spurring sales of domestic wines "is misplaced".

Dilemma of small businesses

Ansley Wine Merchants’ Williams has tasted all of the 1,500 different labels in his stock, most of which he sources from overseas, according to the Reuters report.

Williams expressed concern about the potential impact of the situation on the wine business, stating that while he wasn't overly anxious yet, perhaps he should be. 

He admitted uncertainty about the severity of the consequences, emphasising that 90% of his wine labels originate from overseas, specifically France and Italy. 

He further clarified that these wines are sourced from small, family-owned vineyards and independent producers, distinguishing them from the mass-produced wines commonly found in grocery stores.

Measured approach

Due to distributors and importers adopting a "wait-and-see" approach, there have been almost no new shipments from overseas. 

Williams expressed uncertainty about the future, stating:

"But I won't sell mass-produced wine," he said.

Ryan Stanton, general manager of Ultimate Wine Distributors, an Atlanta-based wine importing company, stated, "Buy America is great in theory, but there are many things that we don't and can't make in America.

The bottom line is that prices are rising."

"We have a lot of wine ready to set sail in France, but it's just parked there as everyone waits to see what happens. It's in negotiations. We're waiting for the dust to settle," Stanton added.