After almost a year and a half, the United States has lifted the 25% tariff on imported wine. Temporarily at least.
Enacted back in the pre-pandemic halcyon days of October 2019, then-US president and notably unrefined palate Donald Trump levied the tariffs on roughly $7.5 billion in European agricultural and industrial goods “stemming from the World Trade Organization (WTO) Aircraft disputes between Boeing and Airbus,” per Food & Wine. This included a tax on all French, Italian, and German wines.
Then on Friday, March 5th, the European Union and United States announced a four-month suspension on the tariffs, much to the delight of the wine world, which F&W notes “have been bearing the brunt of the taxes.”
When combined with the effects of the pandemic, the Trump tariffs have had a deleterious effect on the wine and restaurant industries. With the way the tariff was structured—the entirety of the tax had to be paid up front, on the day the goods enter the United States—importers and distributors were left with a significant portion of their capital tied up. One importer, Harry Root of Grassroots Wine in Charleston, South Carolina, tells Food & Wine that for the last 15 months, roughly 12% of his total working capital has gone to tariffs.
Further downstream, the tariffs reduced the margins on wine sales at restaurants, an industry already existing on razor thin profit-points that has since suffered mightily from the effects of the pandemic.
Currently, the United States Wine Trade Alliance is working to have the suspension enacted and tariffs refunded for all products “on the water,” goods purchased before the tax was lifted but still in transit.
As F&W notes, though, consumers shouldn’t expect to see an immediate drop in prices on their beloved Beaujolais. Wines currently on the shelves were purchased with the tariff in effect and thus subject to the additional 25% markup importers will be looking to make back. And restaurants aren’t likely to further cut into their margins right now.
But this is the first step in the right direction, one the USWTA hopes will become permanent. And honestly, it’s one that should have never occurred in the first place. Because other than going full Wade Boggs on as many bottles of Marlborough Sauv Blanc as you can on a Transatlantic flight, what does wine have to do with airplanes anyway?
Zac Cadwalader is the managing editor at Sprudge Media Network and a staff writer based in Dallas. Read more Zac Cadwalader on Sprudge.
