A Spectre is Haunting the Wine World
Say no to wine tariffs!
Some huge new broke in the wine world this week. The Shanken News Daily, a drinks industry news outlet, reported on February 14th that the U.S. Trade Representative would not be implementing the proposed 100% tariffs on European wine for the time being.
For members of the drinks and hospitality industry this news comes as a well-needed reprieve from months of tariff-induced anxiety and stress. Since the implementation of the 25% tariffs on single malt whiskey from Ireland and Scotland as well as French, Spanish, German, and British wine last November, there’s been only one conversation being had by people in our industry: how will we survive more tariffs?
Harmon and Michael Skurnik
Jenny Lefcourt of Jenny & Francois
Many people stood up to protest the now side-lined 100% tariffs and their efforts surely had an impact on this breaking decision. Tens of thousands of industry members and consumers commented on the Federal Register to recommend against the new tariffs. People like our friend and importer Mary Taylor went on a whole lobbying tour against them, including a trip to testify in front of Congress. That testimony led to a letter signed by 106 members of Congress urging the USTR against new tariffs. Famous importers like Jenny Lefcourt of Jenny & Francois and Harmon Skurnik of Skurnik Wine & Spirits waged media campaigns against it. Wine writers like Eric Asimov and influential critics like Antonio Galloni spoke out against them.
That the collective efforts of our industry resulted in the USTR holding off on these tariffs is something to celebrate, but we must not forget that though the battle has been won today, these tariffs could be back next year with a vengeance. As was aptly pointed out by Streetcar Wine & Beer’s Michael Dupuy in Jamaica Plain, these tariffs would be the single most calamitous event in the drinks industry since prohibition.
Let that sink in for a second.
Tariffs like these have the potential to reshape this industry in such a destructive way that their only historical comparison is prohibition. Nobody stands to win in this situation, not industry members like ourselves nor consumers like you.
Importantly for the USTR, it must be understood that these kinds of tariffs only hurt Americans. One only needs to look at the effects of the existing 25% tariffs to know the how and why. Case sales of wine from France to the US dropped by 48% last November when these tariffs were set into place. The purpose of the tariffs? To make the EU suffer so they would comply with a WTO ruling between Airbus and Boeing.
Aside from the fact that aerospace and wine have nothing in common, how did the EU react to this drop in case sales? They turned to China. In the same month that French wine sales to the US dropped by 48%, French wine sales to China rose by 35%. The point is that the world is thirsty for wine and the US is only one market for it (and a replaceable market at that).
We must remember that arguing against these tariffs isn’t an exercise in futility. We must remember that every restaurant would suffer, many stores will close their doors, importers will shut down, prices will rise, and consumer choice will shrink.
This week we’re drinking Champagne to celebrate the decision by the USTR, but we do so with a spectre lurking over our heads. When the time comes to resist more irresponsible and harmful decisions that affect our industry, I hope that we can once again show the same unity and resolve that won us this victory.
