Trick or treat: Wine tariffs land today
No matter where you stand on the political spectrum, I don't think you're going to be overjoyed about the Trump Administration's tariffs that go into force today.
The tariffs will add an immediate 25 percent tax on French, German and Spanish wines, as well as Parmesan cheese, mussels, coffee, single-malt whiskeys and other agricultural goods from Europe. The list of taxed products, The New York Times wrote earlier this month, "reads like a gourmet shopping list."
In a grown-up version of the game "he said, she said," the tariffs emerge from a long-running U.S. complaint over subsidies given to the European plane maker Airbus, which hit the American plane maker Boeing hard. In a Wednesday ruling, the World Trade Organization declared the subsidies illegal and approved the U.S. plan to recoup the loss by imposing tariffs sufficient to block $7.5 billion in trade from Europe.
Yeah, sure, okay, fine, but for lovers of wines from France, Germany, and Spain, not to mention other good things like European cheese and olives, a tax that high represents a punch in the pocketbook.
The tariff could add $100 to the $398 price for a bottle of Chateau Cos d'Estournel.
"Wineries and importers are baffled and furious," wrote Wine Spectator, in an article published today by writer Mitch Frank headlined "Your Favorite Old World Wine Is About to Get Much More Expensive. "They say the tariffs are so large that they will have no choice but to pass along at least some of the cost to American consumers, though they may cut profit margins to try to minimize the price increases. They expect to lose sales and suffer financially until the trade dispute is settled and they fear that they may lose customers for years to come.""It's a nightmare," Aurélie Bertin of Chateau Sainte-Roseline in southern France told USA Today. "We don't know what will be the result." Her rosé wine business has boomed in recent years thanks to American demand for the beverage, USA Today reported. "She fears her U.S. sales could drop by a third under the new tariffs."
"The costs will be borne at all levels of the trade—producer, importer, distributor, retailer, restaurateur and by consumers too," Martin Sinkoff, former vice president at importer Frederick Wildman & Sons, who now works as a consultant, told Wine Spectator. "Consumers can expect to pay 20% to 30% more for the same wines they buy now."
"Multiple wineries and importers say that they will try to swallow at least some of the cost, but they cannot swallow it all," Wine Spectator said.
But wait! It gets worse! W. Blake Gray at Wine-Searcher.com opined Tuesday that the tariff would be imposed on the wines as they enter the U.S. State and local taxes would then be added, Gray said, based on the import price; which would that the actual price increase could be closer to 30 percent: A wine that is now $20 could become $26, which is a big psychological leap. (This opinion is not universally held. Watch for discussion on this post.)
But there's an asterisk for canny wine buyers who are willing to look for alternatives to the tariffed wines. " The tax is aimed squarely at table wines below 14 percent alcohol, which includes most Bordeaux, Burgundy, and German Rieslings, among other popular imports. But stronger wines, which are increasingly available in this warming age, won't be taxed. Neither will wines from Italy or Portugal, Eastern Europe, and the rest of the world.
While we wait out the tariffs, that's our choice, then. Dig down deeper for the light, elegant European wines that we love. Or rewrite our shopping list. What's your pleasure?
