Here's How the Wine Industry And Consumers are impacted by 200% Tariffs

If 200% tariffs are levied on EU Wines everything gets worse and some things die

President Donald Trump has floated the idea that he is willing to place 200% tariffs on European Wines if the European Union does not remove the tariffs it has recently placed on American whiskey. What would such a policy mean?

It’s important to remember that at this point we are talking about a mere threat. Not a reality. But if anyone tells you that threat cannot turn into a reality—and fast—then slowly back away from that person. They aren’t thinking straight.

First, I’m going to give you real examples of what a 200% tariff would mean in terms of pricing for the consumer. Then I want to run down the consequences for the entire scope of the American wine marketplace if 200% tariffs are actually placed on EU wines.

The Real World Impact of 200% Tariffs on Wine Prices in the U.S.

The difference 200% tariffs make on a $20 wine at retail
Without Tariffs With 200% Tariffs
Importer Pays $8.50. Importer pays $25.50
Consumer Cost: $20 Consumer Cost: $59.00

The difference 200% tariffs make on a $35 wine at retail
Without Tariffs With 200% Tariffs
Importer Pays $15. Importer pays $45
Consumer Cost: $35. Consumer Cost: $80

The difference 200% tariffs make on a $100 wine at retail
Without Tariffs With 200% Tariffs
Importer Pays $43.00 Importer pays $129
Consumer Cost: $100 Consumer Cost: $297

Who believes folks currently paying $20 for an imported wine will happily pay $59 for the very same wine? Is the person currently able to regularly or even occasionally pay $100 for a wine, willing to spend $297 for the same wine? These are rhetorical questions.

The difference between the importer’s cost and the retail cost includes importer, wholesaler, and retailer mark-ups. The above estimates are rough but roughly correct. Additionally, the above estimates don’t account for any additional costs being eaten by the importer, wholesaler, or retailer.

But consider this too. Suppose an importer is bringing in a pallet (56 cases) of a newly discovered Rhone blend and is paying $15 per bottle to land it on shore. Add on the $30 in tariffs and that purchase just cost the importer an additional $20,160 than they had planned. This could result in several things including severely reducing the number of different wines the importer brings in, canceling assumed future orders from the producer, and the importer having to increase the size of its credit line to pay for the additional tariff costs—costing them even more.

And again, I emphasize, that the above figures don’t include the importer, wholesaler, and retailer NOT passing on the increased prices. If they choose to, that means they have even slimmer margins and less profit all the way through the system.

The Consequences of 200% Tariffs on the American Wine Marketplace

A 200% tariff on imported wines from the European Union (EU) would have a seismic impact on the U.S. wine industry, affecting importers, distributors, retailers, restaurants, and consumers. As the wine market is and has been in contraction for a few years, these kinds of tariffs would act as a body blow to numerous businesses and would unquestionably harm consumers. Here’s a breakdown of the most critical consequences:

1. Massive Price Increases on EU Wines

• • A 200% tariff triples the landed cost of EU wines for the importer, translating into unaffordability for many consumers.

• • A bottle that currently costs $20 at retail could jump to $60 or more. Higher-end wines would see even steeper price hikes, effectively pushing them out of the market for all but the wealthiest buyers.

2. Severe Impact on Importers and Distributors

• • Importers and distributors, who rely heavily on European wines, would face massive disruptions. Many importers in particular operate on thin margins already, and such an extreme tariff would likely force some out of business.

• • Companies specializing in French, Italian, or Spanish wines would have to shift focus to other regions (South America, South Africa, Australia) or risk closing.

• The smaller importers and distributors would be hit hardest first, forcing many to either close down or sell to larger operations. This would likely lead to significantly greater consolidation and concentration, particularly at the wholesale tier.

3. Restaurants and Retailers Would Suffer

• • Wine lists at fine dining establishments often feature European wines. With such tariffs, many of these wines would become prohibitively expensive, forcing restaurants to redesign menus

• • Wine retailers, particularly those specializing in imported selections, would lose a significant portion of their inventory or see sales plummet due to price resistance. This in turn could easily lead to many fine wine retailers simply going out of business

4. U.S. Wine Market Would Shift—But Not All Would Benefit

• • Domestic wineries (especially in California, Oregon, and Washington) might see some increased demand, but they cannot fully replace EU wines due to differences in style, availability, and brand loyalty.

• • Consumers seeking affordable alternatives might turn to South American, New Zealand, or Australian wines, boosting imports from those regions instead.

• • Some large-scale U.S. wineries might benefit in the short term, but the disruption in the marketplace could also hurt overall wine consumption.

5. Retaliation & International Trade Wars

• • The EU would almost certainly retaliate with tariffs on American wines, damaging U.S. wineries that rely on exports.

• • The U.S. wine industry has been growing in Europe, particularly for premium California wines, and retaliatory tariffs could stifle that progress.

6. Consumer Behavior Changes

• • Many consumers would trade down to cheaper wines or explore alternative beverages, such as beer, spirits, or hard seltzers. This would accelerate the already declining consumption of wine in the United States.

• • American wine auction houses would likely benefit in the short term. However, prices at auction for European wines would certainly increase for consumers, eventually leading to fewer sales at the auction houses.

A 200% tariff on EU wines would create market chaos, harm businesses across the supply chain, and reduce consumer choice while failing to deliver meaningful benefits to U.S. wine producers. It would likely spark a larger trade war, hurting American wineries that rely on exports, while simultaneously reducing overall wine sales and damaging restaurant and retail industries. Consolidation would ensue, leaving even larger portions of the wine marketplace to the largest wholesalers. The word “catastrophic” does not begin to describe the potential impact.

What can you do? First, follow and contribute to the United States Wine Trade Alliance. They are the body that is directing the most impactful pushback against tariffs: CLICK HERE

Support your trade associations. Join your local, statewide, or national trade association. If you are a retailer, join your local or nationwide trade association. If you are a wholesaler (particularly a smaller one) join your state and national wholesaler trade association. These local and national trade associations 1) can keep you informed, 2) offer advice on how to react to these tariffs, 3) will be involved in pushing back against tariffs, and 4) will provide the kind of benefits you can use to protect your business and cut your costs.