European wine producers and U.S. importers are facing a dual crisis following the implementation of Trump-era tariffs, which have disrupted transatlantic wine trade.
The 15% tariff on European wines entering the U.S., combined with a declining dollar, has forced many American importers who stocked up before the August 1 tariff deadline to confront cash flow shortages. As a result, profit margins are shrinking, some customers have been lost, and a few distributors have even shut down operations.
Meanwhile, European wineries are seeing their access to one of the world’s most lucrative markets severely restricted.
Impact on European Wineries
European exporters, long accustomed to duty-free access for most alcoholic beverages in the U.S., had hoped for exceptions in the latest trade agreement. Instead, shipments have stalled, and producers are earning less from the wine they manage to export. According to Ignacio Sánchez Recarte, Secretary General of the European Association of Wine-Producing Companies (CEEV), the industry could lose between €800 million and €1 billion over the next year.
Some Italian producers report that the average price of Italian wine shipped to the U.S. has dropped by 10% over the past three months. Austrian winemaker Werner Michlitz, who exports more than a third of his wine to the U.S., says he cannot reduce prices to offset tariffs: “At the end, American consumers have to pay, or they will switch to other wines.”
Challenges for U.S. Importers
American importers are also struggling. Ben Annef, President of the U.S. Wine Trade Alliance, highlighted that wine purchased last November may cost 35% more today due to tariffs and currency fluctuations. With European wines accounting for 75% of industry profits, many U.S. distributors have halted hiring, and some have begun laying off staff.
The tariffs also indirectly affect U.S. wineries. With capital tied up in European wine and tariffs, distributors are reducing purchases from domestic producers, causing a ripple effect across the U.S. wine supply chain.
Consumers and Market Adjustments
Wine prices in the U.S. are expected to rise, affecting both European and American wines. While some consumers may pay a premium for preferred European labels, others may switch to alternative options.
In response, European producers are exploring new markets in Canada, Mexico, Brazil, and potentially India, though any benefits from these shifts may take years to materialize.
Trade Commissioner Maroš Šefčovič has pledged to work toward extending U.S. tariff exemptions to include wine and spirits, but progress remains limited.
For now, both European wineries and U.S. importers are navigating a precarious period, with uncertainty about tariffs and their long-term impact on the wine industry.
