US Wine Industry ‘Crushed’ by Trump Tariffs, Canadian Trade Retaliation

American vintners are raising the alarm over the ongoing and future damage allegedly caused by President Donald Trump’s sweeping tariffs, as well as the fallout from Canada’s response to the growing trade war.

According to CNBC, the wine industry had already been struggling in the aftermath of the COVID-19 pandemic, and these recent trade disputes have intensified the problem, with the industry “getting crushed” as a result. And with Canada — and Canadians — now either boycotting wine tourism or simply not seeing U.S. wine on store shelves, American winemakers are speaking out.

“Canada is the single most important export market for U.S. wines with retail sales in excess of $1.1 billion annually,” Robert Koch, the California Wine Institute’s president and CEO, stated.

The news outlet noted that all Canadian provinces had united in pulling U.S.-made beer, wine, and spirits from liquor store shelves and that Canadians largely considered it a point of pride to avoid buying American products in the wake of Trump’s tariffs and threats of annexation.

The outlet also quoted Scott Osborn, owner of Fox Run Vineyards in Penn Yan, on Seneca Lake. Osborn indicated that 10% of his sales came about as a result of Canadian business and that said business had slowed by 20% in March.

“The tariffs will have a huge negative impact on wine in New York,” Osborn said. “The Canadians come here and drink the wine at our café and buy bottles to have with dinner. They don’t take wine across back to Canada, but when they’re here, they enjoy it until it’s time to go back. Not having that business is a big deal.”

Osborn mentioned a similar sentiment brewing among European tourists and customers, many of whom have started “canceling their trips here.”

“It’s going to have a huge impact this summer when they don’t come here. And we’re concerned. The damage is already done. It’s going to be at least a year, if not longer, for my industry to recover,” he added.

US Wine Industry Facing Supply Chain Woes Over Trump Tariffs

NPR detailed that, aside from the direct fallout of the trade war from a consumer relations and sales standpoint, supply chain issues were also top of mind for U.S. winemakers.

First, the cork necessary to stop many wine bottles is imported from Portugal and Spain and is facing the blanket 10% European tariff. Alternatively, screw caps can be used, but aluminum is required to manufacture these, and the metal is often the star subject of many import tariffs under the president’s current policy.

Next up: glass bottles.

“We get our bottles from China [soon subject to a 145% tariff, per NPR], and they’re gonna be increased in terms of tariffs,” said Ken Freeman of Freeman Vineyard & Winery in Sonoma County. “Our costs are gonna go up.”

Glass bottles are also sourced in Mexico, and these could still be slapped with a 25% tariff.

Finally, there’s the matter of the barrel. Many vintners consider French oak barrels to be the de facto option, and these barrels can cost upwards of $1,000.

“Not having French oak will drastically change the flavor profile of many wines,” said Adolfo Hernandez, owner and winemaker at Monroy Wines in Sonoma County, California.

NPR indicated that American oak barrels impart such a different flavor to alcohol stored within them that they’re typically used for bourbon. Given the tariffs on EU-produced oak barrels, these “could be really, really unaffordable for a lot of small producers,” Hernandez said.