You know what business owners love? Uncertainty.
That’s sarcasm—no one likes uncertainty. But the people of the U.S. wine industry are going to have to get used to it for the foreseeable future. So far, the only thing predictable about 2025 is its unpredictability.
An email that arrived in my inbox three days ago carried a striking subject line: “Urgent: HALT ALL E.U. WINE SHIPMENTS.” The March 18 message was a warning from the U.S. Wine Trade Alliance (USWTA), the trade group formed during the first Trump Administration to represent wine importers, distributors, retailers and restaurants in trade issues. The USWTA effectively told importers to keep any containers of European wine in the E.U., lest they risk having to pay 200 percent tariffs when the wine arrived in U.S. ports.
“We strongly advise American companies to HALT ALL SHIPMENTS OF WINE, SPIRITS & BEER FROM THE E.U. The current risk of tariffs is too high,” the email continued. When President Trump imposed 25 percent tariffs on all steel and aluminum imports earlier this month, in response, leaders of the E.U. proposed $28 billion in tariffs, to take effect on April 1. American whiskey was one of the items on their prospective targets.
The President responded by threatening to levy 200 percent tariffs on all European alcoholic beverages. He said, “This will be great for the Wine and Champagne businesses in the U.S.” While Trump did not specify a date for those tariffs, USWTA leaders learned they could come on April 2, the day after the E.U. duties went into effect.
A Temporary Reprieve
But if there’s one clear trend in this trade war, nothing stays certain for long. Yesterday, word came that the E.U. was delaying its tariffs until at least April 13. The USWTA leadership received assurances that any White House retaliation on European wines would wait until April 14. What’s more, various European leaders have been making noises that they’re not so committed to tariffs on American whiskey. French Prime Minister Francois Bayrou told a radio interviewer that the E.U.’s list of potential tariffs needed to be seriously reviewed. He implied Bourbon should not have been included.
If the U.S. and E.U. governments can step back from a whiskey v. wine showdown, that would be great news for the wine industry. Just a week ago, 200 percent tariffs seemed farfetched, and yet, the USWTA made it clear that not only were those tariffs a real possibility, but they might not include an “on the water” exemption. That means importers could order wines at one price, have them loaded on freighters and shipped, only to discover the wines were three times as expensive when they arrived.
You know what wine importers like to have shipped around now? Provençal rosé. Several rosé winemakers told me they were panicking over the idea of putting rosé shipments on hold while they waited for the trade fight to be settled. Even if the tariffs didn’t happen, they would be weeks behind in getting their product to consumers.
You know what spring also brings? The start of “Spritz season,” which demands a lot of Prosecco and Italian amari. Those also would be on hold.
Problem Solved, Right? No.
First, it’s unclear what tariffs the E.U. plans to impose in early April, but they’ve made it clear there will be a response to the steel and aluminum tariffs. The White House has been just as clear that they will match any retaliation. And everyone knows that wine is a highly symbolic product for Europe, meaning it will always be in the crosshairs.
Then there’s “Liberation Day.” President Trump has announced that his next wave of tariffs will be implemented on April 2. "It's a liberation day for our country because we're going to be getting back a lot of the wealth that we so foolishly gave up to other countries, including friend and foe," Trump told reporters. These tariffs are supposed to be far more wide-reaching than the estimated $800 billion in levies placed on Chinese goods, some Mexican and Canadian exports and all steel and aluminum since January.
According to the Wall Street Journal, senior White House advisers are preparing a tariff regime that would impose new duties on most countries. One source told the Journal "trillions of dollars" in imports would be impacted. The President has referred to these as reciprocal tariffs; if a country is perceived as giving any unfair advantage to its industries— whether that’s tariffs on foreign goods, government subsidies or taxes—that would be matched by U.S. tariffs on that country’s exports.
Since last year’s presidential campaign, when President Trump declared, “Tariff is the most beautiful word in the dictionary,” economists, politicians and CEOs have debated how he might use tariffs. Does he see tariffs as a negotiating tactic that he can use to extract concessions from other nations? Or does he see them as the fundamental tool for shaping U.S. trade policy?
So far, the answer is both.
Now, we can argue about whether tariffs, especially on this large a scale, are good for the U.S. economy. (Spoiler alert: I don’t think so.) But let’s get back to uncertainty.
Wine importers can’t make business plans when they’re not sure how much their wines are going to cost next month. Same goes for restaurant owners and retailers, particularly those who have built their offerings around European wines; most diners expect to order Italian wine in Italian restaurants, for example. With wine sales declining, distributors have been laying off staff. With potential tariffs in the air, some have told me they’re holding off on hiring anyone new or taking on any new clients.
Will 200 percent tariffs come to pass? I can’t tell. But neither can anyone else, which is not good for business. Whatever happens, uncertainty hurts.
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