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    US wine importers and bars nervously wait for tariff decision: ‘It’s a sad situation’

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    As the threat of exorbitant US tariffs on European alcohol imports looms, a warehouse in the French port city of Le Havre awaits a delivery of more than 1,000 cases of wine from a dozen boutique wineries across the country.Under normal circumstances, Randall Bush, the founder of Loci Wine in Chicago, would have already arranged with his European partners to gather these wines in Le Havre, the last stop before they are loaded into containers and shipped across the Atlantic. But these wines won’t be arriving stateside anytime soon.After the Trump administration threatened on 13 March to impose 200% tariffs on alcoholic products from Europe, many US importers like Bush have halted all outgoing shipments from Europe.The 1,100 cases of his wine, from family-owned producers in his company’s modest European portfolio, have already been paid for. But due to the tariff threat, they will remain stranded at their respective domaines at least until 2 April when the Trump administration is expected to reveal a “reciprocal tariff number” for each of its global trading partners.The newfound uncertainty around tariffs has many restaurant owners, beverage directors, liquor distributors and wine importers on edge in recent weeks. The only certainty among the trade professionals interviewed is that a 200% tariff would be catastrophic for the wine and spirits industry globally. And while most believe the actual number will end up much lower, everyone agrees that even modest tariffs would send shock waves throughout the entire food and beverage ecosystem, weakening distribution channels and further driving up already astronomical prices.“What scares me is how these hypothetical tariffs would affect [the many] European-themed restaurants like French bistros, Italian trattorias and German beer halls,” said Richard Hanauer, wine director and partner with Lettuce Entertain You. The Chicago-based group owns, manages and licenses more than 130 restaurants and 60 brands in a dozen different states and Washington DC. Hanauer predicts that concept-driven eateries that rely on European products would have to source wine and spirits from other regions because “the consumer is not going to accept the markup”.Even though Trump has been known to walk back dubious claims about tariffs before, the wine and spirits industry is taking this recent threat very seriously. Most American importers, such as Loci’s Bush, are adhering to the US Wine Trade Alliance’s (USWTA) guidance issued in mid-March warning its members to cease wine shipments from Europe. Without guarantees that any potential tariffs would come with a notice period or exemptions for wines shipped prior to their announcement, the organization had no choice but to advise its constituents to halt all EU wine shipments.“Once the wine is on the water, we have no power,” said Bush. “We’re billed by our shippers as soon as the wine arrives.”Tariffs are import taxes incurred by the importer and paid as a percentage of the value of the freight at the point of entry upon delivery. Since shipments from Europe can often take up to six to eight weeks to arrive, firms like Loci face the predicament of not knowing how much they will owe to take delivery of their products when they reach US ports.“We’ve had many US importers tell us that even a 50% unplanned tariff could bankrupt their businesses, so we felt we had no choice,” said Benjamin Aneff, president of the USWTA, of the organization’s injunction. “It’s a sad situation. These are mostly small, family-owned businesses.”Europe’s wineries can also ill afford to be dragged into a trade war with the United States. According to the International Trade Center, the US comprises almost 20% of the EU’s total wine exports, accounting for a total of $14.1bn (€13.1bn) of exported beverage, spirit and vinegar products from the EU in 2024.Many independent importers still recall Trump levying $7.5bn of tariffs on exports from the EU during his first presidency, which included 25% duties on Scotch whiskey, Italian cheeses, certain French wines and other goods. These retaliatory measures, which took effect in October 2019, resulted from a years-long trade dispute between the US and the EU over airline subsidies.“We were hit with duties in late 2019. But we negotiated with a lot of our suppliers, so we were able to stave off any significant price increases,” said André Tamers, the founder of De Maison Selections, a fine-wine importer with a large portfolio of French and Spanish wines and spirits. But because the Covid-19 pandemic hit shortly thereafter, Tamers admitted, it was difficult to gauge the impact of the first round of Trump tariffs. The Biden administration eventually rescinded the measures in June 2021.To pre-empt any potentially disastrous news on the tariff front, many restaurants and bars are ramping up inventory purchases to the extent that their budgets allow. “We made some large commitments for rosé season,” said Grant Reynolds, co-founder of Parcelle, which has an online wine shop as well as two bars and a bricks-and-mortar retail outlet in Manhattan. “To whatever we can reasonably afford, we’ve decided to secure those commitments sooner than later so that we can better weather the storm.”The same is true for many cocktail-focused bars around the country, which are looking to shore up supplies of popular spirits that could end up a victim of tariffs, including allocated scotches and rare cognacs.skip past newsletter promotionafter newsletter promotion“If it becomes very apparent that these tariffs are going to go live, we could be looking at dropping close to $100,000 on inventory just to insulate ourselves because it will save us so much money over the next six months,” said Deke Dunne, beverage director of Washington DC’s award-winning cocktail bar Allegory. “It will have to be a game-time decision, though, because the last thing I want to do is to buy up a lot of inventory I don’t need.” Hanauer said that he’s seen some vendors offering wine buyers heavy discounts and incentives to stockpile cases of European products to prepare for the possibility of onerous tariffs.One bar owner feeling a little less panic compared with his industry counterparts is Fred Beebe, co-owner of Post Haste, a sustainability-minded cocktail bar in Philadelphia. Since it opened in 2023, Post Haste eschews imported spirits of any kind; the bar is stocked exclusively with US products from east of the Mississippi River. “We always thought it would be advantageous to have our producers close to us for environmental reasons and to support the local economy,” said Beebe, “but we didn’t necessarily think that it would also benefit from fluctuations in distribution or global economic policy.”Instead of serving popular European liquor brands such as Grey Goose vodka or Hendrick’s gin, the bar highlights local craft distillers such as Maggie’s Farm in Pittsburgh, which produces a domestic rum made from Louisiana sugar cane. After the recent tariff threats, Beebe says, the decision to rely on local products has turned out to be fortuitous. “I feel really bad for anyone who is running an agave-based program, a tequila or mezcal bar,” said Beebe. “They must be worried constantly about whether the price of all of their products are going to go up by 25% to 50%.”On the importing side, there is agreement that this is an inopportune moment for the wine industry to face new headwinds. Wine consumption has steadily declined in the United States in recent years as gen Z and millennial consumers are turning to cannabis, hard seltzers and spirits such as tequila, or simply embracing sobriety in greater numbers.“Unfortunately, the reality is that wine consumption was already down before this compared to what it was five years ago,” said Reynolds. “This obviously doesn’t help that. So, with more tariffs, you would start to see a greater shift of behaviors away from drinking wine.”But despite slumping sales and the impending tariff threats, niche importers like Tamers say they have little choice but to stay the course. “You leave yourself vulnerable, but if you don’t buy wine, then you don’t have any wine to sell. So, it’s a double-edged sword,” he said. “Our customers are still asking for these products, so there’s not much else we can do.”Aneff hopes that commonsense negotiations will lead to both parties divorcing alcohol tariffs from other trade disputes over aluminum, steel and digital services.“I do have some hope for a potential sectoral agreement on wine, and perhaps spirits, which would benefit domestic producers and huge numbers of small businesses on both sides of the Atlantic,” he said. “I can’t think of anything that would bring more joy to people’s glasses than ensuring free trade on wine.” More

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      Donald Trump threatens 200% tariff on EU wine and champagne

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      Donald Trump has threatened a 200% tariff on wine and champagne from European Union countries, in the latest threat of escalation in the global trade war started by the US president against the country’s biggest trading partners.Trump said in a post on Thursday on his Truth Social platform that the tariffs on all alcoholic products from the bloc would be retaliation for a “nasty” 50% levy on American bourbon whiskey announced by the EU.The EU’s action against bourbon whiskey – due to come into force on 1 April – was itself part of a €26bn ($28bn) response to Trump’s 25% tariffs on steel and aluminium imports, which came into effect on Wednesday.Trump claims the US’s trading partners have taken advantage of the US and that tariffs will help him to bring back jobs – a theory that is roundly rejected by most mainstream economists.The tariffs on the EU, Canada, Mexico and China – and those imposed in retaliation – threaten to tip the US economy into recession, and Trump has admitted there may be a “period of transition” while businesses start producing more in the US.The White House has so far shrugged off the concerns of investors, after his tariff announcements were greeted with heavy stock market sell-offs that have wiped out all of the share price gains since his election in November.Despite starting the trade war, Trump appeared to be infuriated by the EU’s retaliatory measures.He wrote: “If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES.“This will be great for the Wine and Champagne businesses in the U.S.,” he added.The US already circumvents the protected geographical origin rules on European products – American supermarkets are full of US-made imitations of champagne and other delicacies such as parmesan and gorgonzola.Senior figures in Europe vowed to hold firm. “We will not give in to threats,” the French foreign trade minister, Laurent Saint-Martin, wrote on X. “Donald Trump is escalating the trade war he chose to unleash.”France was “determined to retaliate” and would “always protect our sectors”, he added.Trump wrote on Thursday: “The U.S. doesn’t have Free Trade. We have “Stupid Trade.” The Entire World is RIPPING US OFF!!!” Channeling the former US president Franklin D Roosevelt, he added: “The only thing you have to fear, is fear itself!”In France, independent winemakers represent 60% of the country’s wine production. They are watching closely to see how the dispute plays out. “We’re very prudent at this stage,” said Jean-Marie Fabre, who makes wine in Fitou in the south of France.French winemakers were concerned they could be swept into the broader tariff row, and had feared tit-for-tat measures when the EU announced retaliatory tariffs on some American products, including US whiskey.skip past newsletter promotionafter newsletter promotion“The entire wine sector has been through a succession of crises of different kinds which have already really tested us, including the Covid crisis, inflation, the war in Ukraine and the climate issues,” said Fabre, who is also head of the Independent Winemakers of France. “Winemakers, whatever their size, but particularly small winemakers, have found themselves in a fragile position.”European shares fell on Thursday, amid concerns over the impact of a trade war. France’s Cac 40 index gave up morning gains to fall by 0.3%, while Germany’s Dax index fell by 0.6%.Leading European drinks giants came under pressure. Shares in Pernod Ricard fell almost 4% and Rémy Cointreau declined 3.5%. LVMH, owner of Moët & Chandon, slipped 1.4%.In New York, the benchmark S&P 500 dipped 0.7% after Wall Street opened for trading. Trump’s officials have attempted to brush off days of stock market declines, claiming they are not worried about it.“We’re focused on the real economy,” the treasury secretary, Scott Bessent, said during his latest interview on CNBC news network, a fixture on Wall Street. “I’m not concerned about a little bit of volatility over three weeks.”Trump also repeated a longstanding criticism of the EU, that the trading bloc “was formed for the sole purpose of taking advantage of the United States”, calling it “one of the most hostile and abusive taxing and tariffing authorities in the world”.Ursula von der Leyen, the president of the European Commission, the EU’s executive, said on Wednesday that trade between Europe and the US “brought prosperity and security to millions of people, and trade has created millions of jobs on both sides of the Atlantic”. More

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      How the politics of prosecco explain what took the fizz out of the Democrats | Mark Blyth

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      How the politics of prosecco explain what took the fizz out of the DemocratsMark BlythJoe Manchin torpedoed his party’s key bill for the same reason Italy protected the sparkling wine – the local growth model If you get a bad taste in your mouth when you hear the name Joe Manchin – the fossil fuel industry-backed senator from West Virginia who torpedoed his own party’s “Build Back Better” bill just before Christmas – you might want to reach for a glass of something to wash it away.Given that it’s New Year’s Eve, there’s a reasonable chance you’re guzzling a glass of prosecco, which now accounts for just under half of all bubbly drunk globally. While this may take the taste away momentarily, there’s also an odd thing about prosecco I want you to consider. How that glass of Italian bubbly came to be in your hand gives us a window into understanding how a Democratic senator can derail a multitrillion dollar climate-focused national programme that promised huge amounts of money for his own state.No, really. Stay with me here.The stories of prosecco wine and West Virginia coal are classic examples of a regional “growth model”. Growth models describe the “how we make money” bit of an economy, plus the political and electoral coalition that supports it. Think of all the social, political and regulatory structures that build up over time around making and selling a certain good, and all the folks whose jobs and incomes depend upon it.Think of Germany and car exports. From workers to unions to production hubs, to supply chains, to institutional investors, there is an entire ecosystem that supports this way of making a living and the identities and interest it supports. When that is challenged, those who benefit from the model do not sit idly by. Now think of Treviso, Italy, where they make prosecco.Last year a sociologist called Stefano Ponteunpacked the growth model behind prosecco. Prosecco was first bottled in 1924, but it was not until the early 2000s that anglo-millennials got a taste for the stuff and global demand blew up. Prosecco was defined at the time by the grape used to make it, glera, and not by its place of origin (like how all “real” champagne must come from Champagne), which meant that the brand was not protected. In fact, the actual village of Prosecco was about 150km away from the main growing areas and had never grown the grape that makes the drink.Dire end to Biden’s first year as Manchin says no on signature billRead moreSome enterprising British importers wanted to stick as much prosecco as they could into bottles, which would have taken control (and value) away from local producers. Rising to defend the “prosecco miracle” as it was called, the then minister of agriculture, Luca Zaia, a member of the rightwing La Lega party, expanded the “denominazione d’origine controllata DOC” to cover the distant village of Prosecco, which gave this rather generic product a claim to geographical exclusivity.That in turn paved the way for a successful Unesco world heritage claim a few years later, further cementing the region’s claim to the product. The result was a major expansion of production, and prosecco hit €500m in sales in 2019. In short, those who benefited from the growth model rose to defend it.But there were other challenges to this success. This massive expansion of production brought challenges from environmentalists – wine is essentially an agribusiness – and from local residents. But those who benefited from the growth model again leapt to defend it, this time by painting the industry as an example of small-scale, pastoral sustainability – part of a high-end wine-making tradition going back centuries.In fact, as the historian Brian Griffith details, this pastoral and authentically local framing of Italian wine was originally a project of the fascist period. After the first world war, Italy was saddled with vast overproduction of low-quality domestic wines and enmeshed in a moral panic over working-class drunkenness. Wine industry interests close to the government of Mussolini sought to make Italian wines articles of middle-class consumption and a source of national unity. And they used state-backed mythmaking to do so.Medical authorities stressed “the advantages of responsible … wine consumption”. National exhibitions of regional wines were sponsored by the state. Indeed, the whole idea of “gastro-tourism” in Italy was invented in the 1930s by the wine lobby. As Griffith puts it, “the roots of today’s … Italian wines stretch back not to antiquity … but … to the interwar years”. The result was the development of an agribusiness growth model. The prosecco story a century later was just one more turn of this wheel.Now what does all that tell us about Manchin and West Virginia?The Democratic party story on Manchin and West Virginia was that coal was a dying industry, it employed few people and Build Back Better provided a way out. It was simply a question of giving Manchin enough “sweeteners” and it would eventually pass. But Manchin first vetoed the “clean electricity” provisions of the bill and then ran down the clock long enough to kill it. Why did he do this? Because his job is to defend the growth model against challengers, just as it was for the folks in Treviso.As Adam Tooze has noted, by some estimates “nearly one-third of [West Virginian] GDP in 2019 can be attributed to fossil fuels [which] makes decarbonisation a mortal threat”. Now add to this the fact that West Virginia has the lowest labour force participation rate in the US and huge healthcare issues stemming from chronic illness and opioid abuse, and you end up with a fiscal nightmare kept afloat by current growth model. Given this, the notion that the best-paid jobs in the state ($77,000 a year) will be traded away by the state’s leading elected official for some promises on “retraining” and a “Green New Deal” is simply not credible.Growth models are hard to change. Those who profit from them fight to defend them. From Alaska to the Dakotas, to Texas and Louisiana, the core of the GOP electoral coalition, all these states have carbon-heavy growth models. Like the Italian wine industry, they are a creation of the state in the 20th century. They are embodied with myths and are supported by powerful coalitions. Few in Treviso are keen to dismantle the prosecco growth model. Why should West Virginia, and with it the other carbon states of the US, be any different?
      Mark Blyth is a political economist at Brown University
      TopicsDemocratsOpinionJoe ManchinUS politicsWest VirginiaWinecommentReuse this content More

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      in US Politics

      21 things to look forward to in 2021 – from meteor showers to the Olympics

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      From finally seeing the back of Donald Trump to being in a football stadium – the new year is full of promiseYou probably found a few things to enjoy about last year: you rediscovered your bicycle, perhaps, or your family, or even both, and learned to love trees. And don’t forget the clapping. Plus some brilliant scientists figured out how to make a safe and effective vaccine for a brand new virus in record time. Continue reading… More