The New Wine Crisis: Why Prices Are About to Surge

Today at 4 p.m. the Trump administration announced far-reaching tariffs on products from countries around the world. For anyone who loves wine or who works in the wine industry, these tariffs will both reduce consumer choice and in many cases will put American wine businesses in financial jeopardy.

The administration’s position is that tariffs are a levy on foreign businesses and will boost the United States economy, returning manufacturing to the country and resetting longstanding trade imbalances. Economic authorities as politically far-ranging as the Wall Street Journal (conservative) and Nobel Prize-winning economist Paul Krugman (liberal) have commented that this is neither sound economic policy nor helpful to U.S. consumers. As the WSJ wrote on its editorial page on March 31, “The President’s ideological fixation on tariffs is crowding out rational judgments about the consequences.” 

What does the tariffs mean for wine?

The announced tariffs do not affect only wine from Europe. There will be a 10% universal tariff on all U.S. trading partners. That percentage is substantially higher for many wine-producing countries; the E.U, broadly, will have a 20% tariff on all goods (South Africa will be tariffed at 30%). 

Foreign wineries do not directly pay tariffs on wine exported to the U.S. Goods are not tariffed until they reach their U.S. port of entry. So it is the importer — a U.S. company with U.S. employees — that must pay the bill immediately. If $5,000,000 of wine arrives at a U.S. port that, as an importer, you’ve already bought and paid for, with a 20% tariff in place, that means a cash payment of $1,000,000, due immediately. If the importer can meet that payment, then, theoretically, you can recoup the money by raising prices. But in the end, who pays? In many ways, the U.S. consumer.

Harmon Skurnik, of the New York-based importer and wholesaler Skurnik Wines & Liquors, comments, “The tariff — aka tax! — of 20% on European imported goods announced today will result in significant price increases on imported wines, making them less affordable to U.S. consumers and reducing sales — by how much is anyone’s guess. Wines and spirits are not ‘fungible’ — they’re not commodities like steel or aluminum. Instead, they are products that reflect their place of origin (which is why you cannot find U.S.-made Chablis, Barolo, or Rioja, for example.) So a tariff of 20% will raise the prices of these, perhaps not to the extent that all consumers would reject them outright, the way a 50% or 100% would, let alone 200%, but it’s still very bad news. And we aren’t out of the woods yet with the threat of a disastrous 200% tariff — that’s to be decided April 14.” (Skurnik also notes that his company imports a substantial amount of South African wine as well, which will be subject to the higher 30% tariff.)

The tariffs take effect at midnight tonight. So far, no exception has been made for goods already on the water, presenting many U.S. wine importers with an extremely difficult situation. Jeff Kellogg, founder of Jeff Kellogg Selections, a wholesaler in North and South Carolina, says, “We literally have a container arriving on Thursday. I’m not kidding. Our plan is to raise the price by 10% immediately on those wines. [But overall], to offset the losses, we will be raising the price of most of our portfolio by 10-ish percent, including domestic wines. It’s better for us to raise the price on everything a small amount to cover this situation. If we raised the price even more, on just the imports, those sales would disappear and we would just be sitting on that inventory.”

Not only importers are affected by this situation.

As has been noted by Ben Aneff of the U.S. Wine Trade Alliance, every dollar of wine imported to the U.S. results in roughly $4.52 in revenue as it travels through the supply chain. Importers sell to wholesalers, who in turn sell to restaurants and retailers, who then sell to consumers. Essentially, there’s a very large economic ecosystem at work in the U.S. based on imported wine. Americans purchased $31.6 billion of imported wine in 2024, wine that passed through some 4,000 small U.S. importers and distributors, still more restaurants and retailers, and involved the work of countless American wine business employees.

In theory, the tariffs could benefit U.S. wineries, but a trade war of the sort that seems to be presaged by these tariffs isn’t likely to help anyone — witness U.S. wines and spirits being removed from the shelves of liquor stores in Canada recently. If you are the owner of, for example, an Italian restaurant with a 100% Italian wine list, replacing your Chiantis with California Cabernet is a non-starter; ditto if you are a specialist wine retailer focusing on European (or other non-U.S.) wine regions. 

In the end, the result of these tariffs will be, in the wine space, economic hardship for many U.S. wine business owners, potential job losses across the industry, and higher prices and less selection for American wine lovers. And anyone who loves Sancerre, or Provençal rosé, or Champagne, among many other classics, should brace themselves for substantially higher prices.

Skurnik says, “Is this a world that any of us want to live in? Restricted choices and forcing consumers to drink only American wine? Freedom of choice for the American consumer has been a way of life for my entire life. We give away this freedom at our own peril.”

He’s right.