Are the Wine Tariffs Gone? Not So Fast

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You can be forgiven if the current financial markets are making you want a glass of wine. Trouble is, that wine might soon cost more. While the threatened tariffs of 20 percent on all European Union wines and 30 percent on all South African wines lasted less than one day before President Donald J. Trump paused them, tariffs of 10 percent remain in place for almost all wine-exporting nations.

With all the changes in trade policy since February 3, it might be easy to get confused. So here’s a quick update on where the trade battles stand and how this impacts the wines you may want to buy and the vintners who make them.

Wait a second. I thought the tariffs were paused, right?
Some of the tariffs are paused. On April 2, in an address from the Rose Garden of the White House, the President announced a series of tariffs on nearly every nation, based on their total annual trade surplus with the United States. The idea was, if a nation is exporting more goods to the United States than it imports, that must be because of unfair trade barriers. Those proposed tariffs rates included 20 percent tariffs for European Union members, 30 percent for South Africa and 17 percent for Israel.

The tariffs went into effect on April 9. Later that day, Trump announced they would be paused for 90 days to allow for nations to negotiate with the U.S. government and strike deals that would reduce trade imbalances.

But in Trump’s Rose Garden address, he also announced that every nation would face a minimum tariff of 10 percent. That list includes nations like Brazil that import more from the U.S. than they export to the U.S. Trump believes 10 percent is a baseline tariff all imports should face for the foreseeable future.

Are those all the tariffs?
Not exactly. First of all, Trump has already imposed a 25 percent tariff on steel and aluminum imports from all nations. He’s also enacted a 25 percent tariff on automobiles and most automobile parts. In fact, the EU was in the process of devising retaliatory tariffs to the metal duties when Trump imposed his April 2 tariffs. Once he paused, they agreed to pause as well so that Brussels and Washington can negotiate.

Mexico and Canada also face 25 percent tariffs on about half of their exports to the U.S. Those tariffs led the governments in nine of Canada’s 10 provinces to remove American wines from stores and restaurants, wiping out U.S. wine’s biggest market, worth more than $1 billion annually.

And then there’s the panda in the room—China. After a back and forth all this week, Chinese exports to the U.S. now face 145 percent tariffs, while American exports to China face 125 percent tariffs. Chinese President Xi Jinping claims no further retaliation is imminent, but negotiations will not be easy.

While China is not a big market for American wineries, it did reach nearly $50 million last year. Also, China is a source for parts for U.S. wineries, particularly glass bottles. Those are all a lot more expensive now.

OK, so my favorite imported wine faces a 10 percent tariff now. Who pays that?

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Primarily you. While Trump has long claimed that foreign companies pay tariffs, that’s not usually the case. The new tariffs will effectively function as a 10 percent sales tax on your wine. When the wine arrives in U.S. ports, the importers must pay the tariff then to get the wine out of customs. So a bottle they paid the winery $30 for now costs them $33. As the wine goes through a wholesaler and then a retailer or restaurant, they all add their markups—that’s not unfair, they’re running a business after all. But it means that the wine that you used to pay $60 for, now costs you $66.

Now, while 10 percent is not what wineries have been used to, it is much better than 20 percent or 200 percent. So some wineries may be able to swallow a bit of that cost in order to keep their customers. But if Trump plans to keep 10 percent tariffs in place for a long time or if he plans to raise them again after the 90-day pause, foreign wineries are going to begin looking for other markets to sell to. Then the U.S. would lose some of the diversity of wine selections that makes its market so dynamic.

Will these tariffs be in place for a long time?
Excellent question. It’s unclear. Members of the Administration have outlined two, somewhat conflicting, goals for the tariffs. Short-term, they hope the duties will force other countries to enter negotiations and lower barriers to American products in return for tariff relief. But they also speak of keeping the tariffs in place long-term, as both a source of revenue and to encourage companies to base operations and build factories in the U.S. Trump himself showed this week that he’s willing to negotiate, but he’s also willing to keep some tariffs in place.

The dueling purposes have many company owners uncertain as to how long tariffs will remain in place. That’s led some importers to put shipments on hold, worried that they’ll be slapped with even higher tariffs by the time their wines arrive. Sometimes the uncertainty is even worse than the tariffs.


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Coconut trees are iconic plants found across the world’s tropical regions. They’re called “nature’s supermarket” or the “tree of life” in several cultures because every part of the coconut tree is used. Its leaves can be used to thatch homes, its heart can be eaten and its roots have medicinal uses.


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