logo
US wine shops and importers say Trump's threatened 200% tariff on European wines would kill demand

US wine shops and importers say Trump's threatened 200% tariff on European wines would kill demand

The Hill13-03-2025
The United States is suddenly looking less bubbly for European wines.
President Donald Trump on Thursday threatened a 200% tariff on European wine, Champagne and spirits if the European Union goes forward with a planned 50% tariff on American whiskey. Wine sellers and importers said a tariff of that size would essentially shut down the European wine business in the U.S.
'I don't think customers are prepared to pay two to three times more for their favorite wine or Champagne,' Ronnie Sanders, the CEO of Vine Street Imports in Mt. Laurel Township, New Jersey, said.
Jeff Zacharia, president of fine wine retailer Zachys in Port Chester, New York, said 80% of the wine he sells is from Europe. Importers depend on European wines for a big part of their distribution system, he said, and there's not enough U.S. wine to make up for that.
'This is just going to have a major negative impact on the whole U.S. wine industry in all aspects of it, including U.S. wineries,' he said.
Zacharia said there are so many unknowns right now he's stopped buying European wine until the picture becomes clearer.
'It's very hard to make preparations when as a business you don't have a clear path forward,' he said. 'Our preparations would be very different if it's 200% compared to 100% compared to 10%.'
Wine and spirits from the 27-nation European Union made up 17% of the total consumed in the U.S. in 2023, according to IWSR, a global data and insight provider specializing in alcohol. Of that 17%, Italy accounted for 7% — mostly from wine – and French wine, cognac and vodka accounted for 5%.
Overall, the U.S. imports much more alcohol than it exports. The $26.6 billion worth of foreign-produced alcoholic beverages that entered the country in 2022 accounted for 14% percent of all U.S. agricultural imports, according to the U.S. Department of Agriculture. The U.S. exported $3.9 billion worth of beer, wine and distilled spirits that year.
Marten Lodewijks, president of IWSR U.S., said a 200% tariff would not be unprecedented but import duties of that size tend to be more targeted.
In 2020, China imposed tariffs as high as 218% on Australian wine, which caused exports to plunge by 90%, Lodewijks said. China lifted the tariffs last year, but by then Australia's wine industry had taken a big hit. Australia's wine trade to China was worth 1.1 billion Australian dollars ($710 million) annually before the tariffs were put in place.
Europe's tax on American whiskey, which was unveiled in response to the Trump administration's steel and aluminum tariffs, is expected to go into effect on April 1. Trump responded Thursday in a social media post.
'If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES,' Trump wrote. 'This will be great for the Wine and Champagne businesses in the U.S.'
Trump was incorrect about the Champagne business. Champagne is a legally protected wine that can only come from France's Champagne region. But U.S. winemakers — including Trump Winery, a Virginia winery owned by the president's son Eric Trump — do make sparkling wine.
Reaction from across the Atlantic was swift Thursday.
'We must stop a dangerous escalation that is leading to a global trade war where the first victims will be U.S. citizens who will pay more for products, and with them, farmers,'' Ettore Prandini, president of Italy's Coldiretti agriculture lobby, said.
Italian wine exports to the U.S. – led by prosecco — have tripled in value over the last 20 years and reached 1.9 billion euros ($2.1 billion) last year. In France, the U.S. market for wines and spirits is worth 4 billion euros ($4.3 billion) annually.
Gabriel Picard, who heads the French Federation of Exporters of Wines and Spirits, said 200% tariffs would be 'a hammer blow' for France's alcohol export industry, impacting hundreds of thousands of people.
'Not a single bottle will continue to be expedited if 200% tariffs are applied to our products. All exports to the United States will come to a total, total, halt,' Picard said in an interview with The Associated Press.
French transporter Grain de Sail, which uses sail power to ship wines and other goods across the Atlantic, said Thursday that some winemakers had already cancelled planned shipments of wine to the U.S. because they were anticipating tariffs even before Trump's announcement.
'It has more or less frozen exports. There's no point even hoping to send wine to the United States under these conditions,' said Jacques Barreau, the firm's co-founder.
Some U.S. wine stores saw an opportunity Thursday. In Washington, the wine bar Cork announced a tariff sale, encouraging regulars to come stock up on their favorite wines while they're still affordable.
Others wondered aloud whether Trump would really go through with a 200% tariff.
'It changes by the hour now, right?' Mark O'Callaghan, the founder of Exit 9 Wine & Liquor Warehouse in Clifton Park, New York, said. European wines make up around 35% of sales at his store, he said.
Others seemed to want to stay out of the fray. Total Wine, which operates 279 stores in 29 U.S. states, didn't respond to a request for comment Thursday. Southern Glazer's Wine & Spirits, one of the country's largest alcohol distributors, also didn't respond to a message seeking comment.
Anderson reported from New York. Durbin reported from Detroit. AP Writers Colleen Barry in Rome, John Leicester in Paris and Zeke Miller in Washington contributed.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Trump's golf trip to Scotland reopens old wounds for some of his neighbors
Trump's golf trip to Scotland reopens old wounds for some of his neighbors

USA Today

time26 minutes ago

  • USA Today

Trump's golf trip to Scotland reopens old wounds for some of his neighbors

BALMEDIE, Scotland − Long before he was the 45th and the 47th president, on a wild and windswept stretch of beach in northeast Scotland, Donald Trump the businessman, was accused of being a bad neighbor. "This place will never, ever belong to Trump," Michael Forbes, 73, a retired quarry worker and salmon fisherman, said this week as he took a break from fixing a roof on his farm near Aberdeen. The land he owns is surrounded, though disguised in places by trees and hedges, by a golf resort owned by Trump's family business in Scotland, Trump International Scotland. For nearly 20 years, Forbes and several other families who live in Balmedie have resisted what they describe as bullying efforts by Trump to buy their land. (He has denied the allegations.) They and others also say he's failed to deliver on his promises to bring thousands of jobs to the area. Those old wounds are being reopened as Trump returns to Scotland for a four-day visit beginning July 25. It's the country where his mother was born. He appears to have great affection for it. Trump is visiting his golf resorts at Turnberry, on the west coast about 50 miles from Glasgow, and at Balmedie, where Forbes' 23 acres of jumbled, tractor-strewn land, which he shares with roaming chickens and three Highland cows, abut Trump's glossy and manicured golf resort. On July 28, Trump will briefly meet in Balmedie with British Prime Minister Keir Starmer to "refine" a recent U.S.-U.K. trade deal, White House Press Secretary Karoline Leavitt said. Golf, a little diplomacy: Trump heads to Scotland In Scotland, where estimates from the National Library of Scotland suggest that as many as 34 out of the 45 American presidents have Scottish ancestry, opinions hew toward the he's-ill-suited-for-the-job, according to surveys. "Trump? He just doesn't know how to treat people," said Forbes, who refuses to sell. What Trump's teed up in Scotland Part of the Balmedie community's grievances relate to Trump's failure to deliver on his promises. According to planning documents, public accounts and his own statements, Trump promised, beginning in 2006, to inject $1.5 billion into his golf project six miles north of Aberdeen. He has spent about $120 million. Approval for the development, he vowed, came with more than 1,000 permanent jobs and 5,000 construction gigs attached. Instead, there were 84, meaning fewer than the 100 jobs that already existed when the land he bought was a shooting range. Instead of a 450-room luxury hotel and hundreds of homes that Trump pledged to build for the broader community, there is a 19-room boutique hotel and a small clubhouse with a restaurant and shop that sells Trump-branded whisky, leather hip flasks and golf paraphernalia. Financial filings show that his course on the Menie Estate in Balmedie lost $1.9 million in 2023 − its 11th consecutive financial loss since he acquired the 1,400-acre grounds in 2006. Residents who live and work near the course say that most days, even in the height of summer, the fairway appears to be less than half full. Representatives for Trump International say the plan all along has been to gradually phase in the development at Balmedie and that it is not realistic or fair to expect everything to be built overnight. There's also support for Trump from some residents who live nearby, and in the wider Aberdeen business community. "There used to be nothing but dunes here," said one Balmedie resident who lives in the shadow of Trump's course. "He's made it look a lot more attractive, no matter what other people might say." Fergus Mutch, a policy advisor for the Aberdeen and Grampian Chamber of Commerce, said Trump's golf resort has become a "key bit of the tourism offer" that attracts "significant spenders" to a region gripped by economic turmoil, steep job cuts and a prolonged downturn in its North Sea oil and gas industry. Trump in Scotland: Liked or loathed? Still, recent surveys show that 70% of Scots hold an unfavorable opinion of Trump. Despite his familial ties and deepening investments in Scotland, Trump is more unpopular among Scots than with the British public overall, according to an Ipsos survey from March. It shows 57% of people in England, Scotland, Wales and Northern Ireland don't view Trump positively. King Charles invites Trump: American president snags another UK state visit While in Balmedie this time, Trump will open a new 18-hole golf course on his property dedicated to his mother, Mary Anne MacLeod, who was a native of Lewis, in Scotland's Western Isles. He is likely to be met with a wave of protests around the resort, as well as the one in Turnberry. The Stop Trump Coalition, a group of campaigners who oppose most of Trump's domestic and foreign policies and the way he conducts his private and business affairs, is organizing a protest in Aberdeen and outside the U.S. consulate in Edinburgh. During Trump's initial visit to Scotland as president, in his first term, thousands of protesters sought to disrupt his visit, lining key routes and booing him. One protester even flew a powered paraglider into the restricted airspace over his Turnberry resort that bore a banner that read, "Trump: well below par #resist." 'Terrific guy': The Trump-Epstein party boy friendship lasted a decade, ended badly Trump's course in Turnberry has triggered less uproar than his Balmedie one because locals say that he's invested millions of dollars to restore the glamour of its 101-year-old hotel and three golf courses after he bought the site in 2014. Trump versus the families Three families still live directly on or adjacent to Trump's Balmedie golf resort. They say that long before the world had any clue about what type of president a billionaire New York real estate mogul and reality-TV star would become, they had a pretty good idea. Forbes is one of them. He said that shortly after Trump first tried to persuade him and his late wife to sell him their farm, workers he hired deliberately sabotaged an underground water pipe that left the Forbes – and his mother, then in her 90s, lived in her own nearby house – without clean drinking water for five years. Trump International declined to provide a fresh comment on those allegations, but a spokesperson previously told USA TODAY it "vigorously refutes" them. It said that when workers unintentionally disrupted a pipe that ran into an "antiquated" makeshift "well" jointly owned by the Forbeses on Trump's land, it was repaired immediately. Trump has previously called Forbes a "disgrace" who "lives like a pig." 'I don't have a big enough flagpole' David Milne, 61, another of Trump's seething Balmedie neighbors, lives in a converted coast guard station with views overlooking Trump's course and of the dunes and the North Sea beyond. In 2009, Trump offered him and his wife about $260,000 for his house and its one-fifth acre of land, Milne said. Trump was caught on camera saying he wanted to remove it because it was "ugly." Trump, he said, "threw in some jewelry," a golf club membership (Milne doesn't play), use of a spa (not yet built) and the right to buy, at cost, a house in a related development (not yet constructed). Milne valued the offer at about half the market rate. When Milne refused that offer, he said that landscapers working for Trump partially blocked the views from his house by planting a row of trees and sent Milne a $3,500 bill for a fence they'd built around his garden. Milne refused to pay. Over the years, Milne has pushed back. He flew a Mexican flag at his house for most of 2016, after Trump vowed to build a wall on the southern American border and make Mexico pay for it. Milne, a health and safety consultant in the energy industry, has hosted scores of journalists and TV crews at his home, where he has patiently explained the pros and cons − mostly cons, in his view, notwithstanding his own personal stake in the matter − of Trump's development for the local area. Milne said that because of his public feud with Trump, he's a little worried a freelance MAGA supporter could target him or his home. He has asked police to provide protection for him and his wife at his home while Trump is in the area. He also said he won't be flying any flags this time, apart from the Saltire, Scotland's national flag. "I don't have a big enough flagpole. I would need one from Mexico, Canada, Palestine. I would need Greenland, Denmark − you name it," he said, running through some of the places toward which Trump has adopted what critics view as aggressive and adversarial policies. Dunes of great natural importance Martin Ford was the local Aberdeen government official who originally oversaw Trump's planning application to build the Balmedie resort in 2006. He was part of a planning committee that rejected it over environmental concerns because the course would be built between sand dunes that were designated what the UK calls a Site of Special Scientific Interest due to the way they shift over time. The Scottish government swiftly overturned that ruling on the grounds that Trump's investment in the area would bring a much-needed economic boost. Neil Hobday, who was the project director for Trump's course in Balmedie, last year told the BBC he was "hoodwinked" by Trump over his claim that he would spend more than a billion dollars on it. Hobday said he felt "ashamed that I fell for it and Scotland fell for it. We all fell for it." The dunes lost their special status in 2020, according to Nature Scot, the agency that oversees such designations. It concluded that their special features had been "partially destroyed" by Trump's resort. Trump International disputes that finding, saying the issue became "highly politicized." For years, Trump also fought to block the installation of a wind farm off his resort's coast. He lost that fight. The first one was built in 2018. There are now 11 turbines. Ford has since retired but stands by his belief that allowing approval for the Trump resort was a mistake. "I feel cheated out of a very important natural habitat, which we said we would protect and we haven't," he said. "Trump came here and made a lot of promises that haven't materialized. In return, he was allowed to effectively destroy a nature site of great conservation value. It's not the proper behavior of a decent person." Forbes, the former quarry worker and fisherman, said he viewed Trump in similar terms. He said that Trump "will never ever get his hands on his farm." He said that wasn't just idle talk. He said he's put his land in a trust that specified that when he dies, it can't be sold for at least 125 years.

Luxury shopper recovery faces four key headwinds
Luxury shopper recovery faces four key headwinds

CNBC

time27 minutes ago

  • CNBC

Luxury shopper recovery faces four key headwinds

High-end spenders are painting a mixed picture when it comes to the luxury market's long-awaited recovery, with softer sales still weighing on company forecasts. But better-than-feared results from bellwether fashion house LVMH moved luxury stocks higher Friday, as investors bet on the emergence of green shoots of recovery. LVMH posted a 4% year-on-year drop in second quarter sales to 19.5 billion euros after the market close Thursday, slightly below a consensus forecast for a 3% decline. "This was not a stellar quarter for LVMH," Deutsche Bank's Adam Cochrane, a luxury equity research analyst, wrote in a Friday note. "However, we see some glimmers of hope with a sequential improvement in cFX [constant currency] sales expected from 3Q onwards and most of the sales weakness related to weaker tourism." Here's a look at four key trends to look out for as earnings season rolls on, with fresh numbers due next week from Kering, Hermes and Prada. Foreign exchange fluctuations are a perennial concern for luxury firms, but that's even more the case this quarter as they face high comparable sales from last year. A sharp decline in the Japanese yen sparked a surge in tourist flows and luxury shopping in the country in 2024. But now brands are battling a rebalancing. Richemont saw sales in Japan drop 15% year-on-year in the three months to June, following a 59% jump over the same period the year prior. Burberry also cited a "challenging performance" in Japan in the second quarter, and Moncler said Japan was its only negative-performing Asia market — both without providing specific figures. Some firms noted, however, that a downturn in tourism to Japan — and to a lesser extent Europe — has resulted in an uptick in domestic spending in certain other markets. "[In China] we have seen tangible improvement locally," said LVMH's Chief Financial Officer Cécile Cabanis during an earnings call Thursday, citing a "repatriation from the big drop we've seen in tourism to Japan." Several luxury firms have also pointed to a strengthening of U.S. sales in the second quarter, even as consumers wait with bated breath for the impact of tariffs. Burberry, Richemont, Moncler and Brunello Cucinelli all reported increased sales in their American markets over the second quarter, while LVMH noted that American demand was "broadly unchanged." Still, the extent to which that uptick is driven by U.S. customers frontloading purchases ahead of the full onset of tariffs is not yet clear, according to the firms. "To tell you that this was driven by an anticipation of buying links to the tariffs? Honestly, I cannot tell you," Roberto Eggs, Moncler's chief business strategy and global market officer, said on an earnings call Wednesday. Luxury companies have also been honing in on the U.S. market in recent quarters in a bid to compensate for continued soft demand in the key Chinese market. Burberry CEO Joshua Schulman said the company's recent U.S. growth indicated the "diversity of the luxury consumer that exists in that market," from elite, high-spenders to high-traffic mall shoppers. U.S. tariffs are nonetheless weighing on the outlook for most European luxury houses, who rely heavily on localized production as part of their cache. As such, many have suggested that they will need to raise prices in the coming quarters to offset added costs. Brunello Cucinelli flagged price hikes of 3% to 4% in the U.S. while Moncler said it was implementing "mid-single-digit" percentage increases for the coming 12 months. Burberry, meanwhile, said it began adjusting prices last year as part of broader overhaul plans. LVMH, on the other hand, said Thursday that prices rises would need to come with an "improvement in the product" or modest rebalancing around inflation. However, the French luxury conglomerate then went on to cite price hikes among "several levers" at its disposal to counter the impact of tariffs. It comes as the cost of luxury goods has risen by an average of 3% so far this year — the slowest pace since 2019 — according to UBS' evidence lab, as brands have sought to reconcile consumer retention with higher input costs following a Covid-era surge in prices. Finally, category mix remains a fundamental factor in the divided luxury picture, with brand appeal playing as much of a role as the product type itself. Jewelry remains a winning play for Cartier-owner Richemont, even as high-end watches — both its own and those of other luxury watchmakers — remain a weak point. Tiffany-owner LVMH, however, continues to battle softness in its jewelry and fashion and leather goods maisons, despite leather handbags going from strength to strength for ultra-luxe brand Hermes. Carole Madjo, Barclays' head of European luxury goods research, told CNBC that she expects leather goods dominance to continue to play out when Hermes reports on Wednesday. "[Hermes] is always very good, thanks to leather goods mostly," she told "Squawk Box Europe" on Tuesday. Meanwhile, investors will be eagerly awaiting more color on Tuesday from Gucci-owner Kering on its product overhaul under artistic director Demna Gvasalia and incoming CEO Luca de Meo. "Bringing newness, something fresh which has not been seen before, is I think what could make Gucci great again," Madjo said.

Pope Leo reflects on migrants and refugees as ‘messengers of hope'
Pope Leo reflects on migrants and refugees as ‘messengers of hope'

Washington Post

time27 minutes ago

  • Washington Post

Pope Leo reflects on migrants and refugees as ‘messengers of hope'

Pope Leo XIV urged the public to see migrants and refugees as 'messengers of hope' on Friday, as the Trump administration focuses on mass deportation efforts in the pontiff's former home country. In a letter, Leo wrote that the 'widespread tendency to look after the interests of limited communities' poses a serious threat to the 'pursuit of the common good and global solidarity for the benefit of our entire human family.'

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store