U.S. Wine Imports Make Up 37% Of Market: Analyzing The Impact of Potential Tariffs

Forbes

20-03-2025

Analyzing the Impact of Wine Tariffs for the U.S. Market
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The U.S. is the fourth largest wine-producing nation in the world but still doesn't produce enough wine to slake the thirst of American wine lovers. Instead, every year, the U.S. imports around 37% of the wine it consumes, about 5 times more than it exports.
This analysis was conducted by Rafael del Rey, an international wine economist and founder of Del Rey Analysts of Wine Markets (Del ReyAWM). Headquartered in the E.U. and with more than 30 years of experience analyzing the global wine trade, he has recently published a report on the impact of the potential 200% tariffs the Trump administration has threatened on E.U. wine exports, as well as strategies businesses can adopt.
'Given that 72.3% of the imported wine to the U.S. comes from EU countries, the potential 200% tariff increase would make it nearly impossible for distributors and consumers to continue purchasing them at the new prices,' stated del Rey, in an online interview.
For example, a bottle of Veuve-Clicquot Yellow Label Brut Champagne – the top-selling Champagne in the U.S. market, which averages around $65 per bottle at retail, could soar to over $150 per bottle.
'Ultimately, American consumers would face a difficult choice: either pay significantly higher prices for wine or reduce their consumption,' continued del Rey.
Wine Imports and exports In and From the U.S.
Del Rey
Of course, American wineries could benefit from expanding their wine production and brands to fill in the gap, but will U.S. consumers be willing to give up their European wines?
Given that 49% of American wine consumers regularly or occasionally drink wine from the E.U., according to the Wine Market Council, many consumers may be reluctant to give up their 'old world wines' – many of which have different flavors and styles than their U.S. counterparts.
Furthermore, the time to plant and develop new vineyards to increase U.S. production ranges from 2 to 5 years, so the lag time would be quite significant. Plus, at this point, there doesn't appear to be any message to drink more American wine.
However, the American wine market is quite lucrative – even with declining consumption – because consumers continue to trade up in price points. According the Gomberg-Fredrikson, a U.S. wine market intelligence firm, Americans purchased $78.9 billion worth of domestic wine and $31.6 billion of imported wine in 2024, up from 3.4% in value from 2023.
The tariff conversation appears to be shifting on almost a daily basis, leading experts to question the outcome. Will the proposed EU wine tariffs ultimately end at 200%, or be negotiated to similar levels as those imposed by the Trump administration in 2019?
'EU wine producers had already faced a tariff hike in 2019, but it was limited to the four countries involved in the Airbus project—France, Spain, Germany, and the UK. That increase was 25%, initially backed by the WTO, and was resolved within a few months,' reported del Rey.
But it is possible that the EU could retaliate similarly to Canada when they were threatened with a 25% tariff. Even though the proposed tariff was paused until April 2, Canadian retailers retaliated by immediately canceling all U.S. wine orders and removed American wines from their store shelves.
It is possible that the EU could engage in further retaliation tactics, such as taxing French wine barrels, corks, bottles, and other wine production equipment that American wineries purchase from European countries.
'These tariffs started when the U.S. imposed tariffs on EU aluminum, the EU responded by raising tariffs on U.S. bourbon, and the U.S. retaliated with higher tariffs on EU wines—creating an endless cycle. It's a senseless approach,' stated del Rey.
'In the end, businesses on both sides and, most importantly, consumers, bear the greatest burden,' he added.
'In the end, businesses on both sides and, most importantly, consumers, bear the greatest burden from the proposed EU tariffs.'
Rafael del Rey, International Wine Economist, Founder, Del Rey Analysts of Wine Markets
Del Rey
When asked what wine businesses and consumers could do to successfully navigate this dynamic period of tariff wars, del Rey responded:
'Convincing the new U.S. administration of these negative consequences is one part of the strategy. The other key strategy is diversification. This was evident when Australia faced new Chinese tariffs and again during the pandemic when different countries imposed varying trade and consumption restrictions.'
However, with the U.S. being the largest wine-consuming market in the world, it is not realistic in the short term that EU producers will be able to find a home for all of their wine.
According to Ignacio Sanchez Recarte, Secretary General of the Comité Européen des Entreprises Vins, in an interview with Bloomberg, many grape growers and wine producers will be in deep financial trouble. 'Will see companies closing the door, because there is no way we can find an alternative market that quickly.'
While in the U.S. many wine lovers are already stocking up on their favorite European wines, with reports of run on Champagne, Prosecco, and other popular wine styles and regions.
America is the Largest Wine Market in the World
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