Trump Ups Ante On E.U. Drinks Tariffs, Threatening 200% Levy
With heightened tariffs looming on both sides of the Atlantic, wine and spirits players at all three tiers are bracing for increased costs and lower margins. This morning, President Trump threatened to levy a 200% tariff on “all wines, Champagnes, and alcoholic products coming out of France and other E.U. represented countries.”
That followed the European Union’s announcement yesterday that on April 1 its previously suspended tariffs on American whiskies will be reinstated at 50%, in response to U.S. levies on steel and aluminum. The E.U. tariffs would return American whiskey producers to the challenges faced during the first Trump administration, when tariffs caused whiskey exports to fall by 20%—or $112 million—between 2018 and 2021.
“Reimposing these debilitating tariffs at a time when the spirits industry continues to face a slowdown in U.S. marketplace will further curtail growth and negatively impact distillers and farmers in states across the country,” said a statement from DISCUS. “We urge the U.S. and E.U. governments to come to a resolution that gets our spirits industry back to zero-for-zero tariffs.”
In the U.S., there are also unspecified “reciprocal tariffs” set to be imposed on agricultural products from various countries on April 2, on which Trump this morning upped the ante. Those levies would represent a serious blow for wine and spirits importers, distributors, and retailers already weathering uncertain conditions and tight margins.
A roundtable event hosted yesterday by the U.S. Wine Trade Alliance (USWTA)—a coalition of industry players from all three tiers advocating against tariffs—focused on the potential impacts of heightened trade barriers in the U.S. Restaurateur Andy Fortgang, co-owner and wine director at Oregon’s Le Pigeon & Canard restaurants, laid out plainly the importance of imported wine for America’s fine dining segment, noting that the category accounts for outsized profits.
“We were just looking back at the last year as we were doing our taxes, and among the three restaurants that I share ownership in, one had a profit margin of 4%, one 6%, and one 9%,” said Fortgang. “When you think about how much of that free profit margin is coming from beverage versus from food, we see how squeezing that becomes really difficult and makes the tariffs a profit killer.”
Lisa Perini of Perini Steakhouse in Buffalo Gap, Texas, echoed Fortgang’s concerns about tariffs crushing wine margins. With food costs at current levels, Perini noted that after adding in labor, her restaurant has roughly 10% left to split between overhead and profit.
The panel—which also included USWTA president Ben Aneff; Kelby James Russell of Finger Lakes winery Apollo’s Praise; and Harry Root, president of distributor Grassroots—made a point to highlight that consumers don’t necessarily swap to lower-priced or domestic wines when looking for Bordeaux, for example. “If the price point is too high,” said Fortgang, “you just sort of lose that sale.”
For distributors like Root, imported wine is a key driver of profit, as the higher margins he gets on imports allow him to support up-and-coming American wineries he’s passionate about. “About 60% of our revenue comes from imported wine, but that revenue represents about 75% of our gross profit,” he said. “Wines, in effect, subsidize the success of restaurants in the United States; imported wines subsidize the distribution level in the United States.”—Shane English
| Imported Table Wine Market In the U.S. (millions of 9-liter case depletions) |
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| Origin1 | 2023 | 2024E | Percent Change2 |
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|---|---|---|---|---|---|---|
| Italy | 22.81 | 21.85 | -4.2% | |||
| France | 12.86 | 12.42 | -3.4% | |||
| New Zealand | 7.66 | 7.67 | 0.2% | |||
| Australia | 6.56 | 6.50 | -2.2% | |||
| Chile | 3.85 | 3.84 | -0.2% | |||
| Argentina | 3.75 | 3.43 | -8.4% | |||
| Spain | 3.24 | 3.13 | -3.5% | |||
| Portugal | 2.07 | 2.03 | -2.0% | |||
| Germany | 1.65 | 1.58 | -4.3% | |||
| South Africa | 0.75 | 0.72 | -3.8% | |||
| Other Origins | 1.88 | 1.79 | -5.1% | |||
| Total Imported Table Wine3 |
67.16 | 64.95 | -3.3% | |||
| 1 Includes some domestic table wine sourced from overseas. 2 Based on unrounded data. 3 Addition of columns may not agree due to rounding. Source: IMPACT DATABANK © 2025 |
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