Happy "Liberation Day" To All (Idiots) Who Celebrate
Trump's tariffs will damage the wine and spirits business in America, this much we know. It may even kill it.
So it appears that tomorrow, at 4 p.m. EST in the Rose Garden, we will have clarity on Trump’s awaited, sweeping “reciprocal” tariffs. The MAGA crowd is calling this “Liberation Day.” But let’s be crystal clear: For the wine and spirits industry—for wineries, importers, distributors, wine shops, liquor stores, restaurants, bars, sommeliers, bartenders, servers, kitchen staff—it is a complete fucking nightmare.
This tariff situation surely goes far beyond the world of wine and spirits. As Moody’s Analytics chief economist Mark Zandi told CNN today: a 20 percent universal tariff—combined with retaliation from other nations on US goods— would be a “worst-case scenario” for the U.S. economy. A Moody’s simulation found that such a trade war would immediately wipe out 5.5 million jobs, raise the unemployment rate to 7 percent, and cause U.S. GDP to drop by 1.7 percent. “If that happens, we get a serious recession,” Zandi said. “It’s a wipeout for the economy.”
Still, alcoholic beverages have been singled out by this president, who recently threatened a 200 percent tariff on European wine and spirits if the European Union moves forward with a planned 50 percent tariff on American whiskey. Let’s not mince words: a 200 percent tariff would essentially shut down the business of European wines and spirits in the U.S.
The US Wine Trade Alliance (USWTA), which represents importers, wholesalers, retailers, restaurants, and producers in the fight against wine tariffs has sent a number of alarming email to its membership. “We strongly advise American companies to HALT ALL SHIPMENTS OF WINE, SPIRITS & BEER FROM THE E.U.,” read one email. “The current risk of tariffs is too high.”
On Saturday, USWTA sent another email expressing dismay at how quickly the tariffs were coming:
We have spent the last several days in Washington D.C., asking members of Congress, and staff at USTR and Commerce, to keep tariffs off wine. Likewise, we have stated clearly how catastrophic April 2 would be for American businesses if they imposed tariffs without a notice period or goods-on-the-water exception. While we have no guarantee, we are hopeful any tariffs imposed would allow for businesses to receive the goods that were already in transit without a damaging surprise tariff.
Uncertainty is a frustrating yet defining element of this process, and we understand how truly damaging this is to your businesses. We know that many of you have halted all shipments of wine from the EU, as we are still in purgatory, waiting for the forthcoming announcements from the EU and the U.S. regarding steel tariffs and any potential retaliations that could impact our industry. American businesses are suffering right now, and the administration will need to work hard to right the ship. Policies that prevent American businesses from generating the revenue they need to survive are incredibly harmful.
In the USTWA’s latest email, they note that “Commerce Secretary Lutnick indicated to the EU that reciprocal tariffs somewhere between 10 percent and 25 percent could now be imposed as soon as April 2.”
So as of this afternoon, the tariffs on wine and spirits could fall anywhere between 10 and 200 percent. “Uncertainty” and “purgatory” are an understatement. Wine businesses are already making pre-emptive decisions.
Stephen Bradley, in his newsletter From Scratch, reported that Jenny Lefcourt, owner of the major importer Jenny & François—which imports wines from over 13 countries and distributes to 46 states—had paused all imports until further notice. Five years ago, Lefcourt wrote an op-ed in the New York Times on “The Insanity of Trump’s Wine Tariffs.”
My office neighbor, David Spell, owns Elevation Wine Partners, an importer of wines from France, Italy, Spain, Portugal, and South America, as well as some producers from California and Texas. When I talked with him this morning, he was (understandably) incredibly stressed. He currently has three shipments on the water right now, making their way across the Atlantic to a port in New York. “I will literally go out of business if he’s serious about a 200 percent tariff. I don’t have the cash to write a $200,000 check for wine—wine that I will still have to sell.”
Even a 20 percent tariff is going to be hard to swallow. Spell estimates that 75 percent of the bottles in his portfolio are sold as by-the-glass pours at restaurants and bars, retailing for around $20 and under. They’re the kinds of everyday European wines that people like to drink—the sorts of wines are the reason that many of us are wine lovers to begin with. If these bottles suddenly sell for $30 or $50 or higher, the entire landscape changes.
Yes, I’ve heard the facile argument that this is going be “good” for the American wine industry, for places like California and Oregon and the Finger Lakes and elsewhere. No. It’s not going to be good for anyone. First of all, it’s not going to serve American wineries if there’s a mass extinction of wine distributors, bars, restaurants, and other wine-adjacent business. And where do we think that American wineries source their barrels, winemaking equipment, and other materials?
Finally, for any of those MAGA morons or neo-prohibitionists or religious zealots who want to tell you that drinking European wine is “un-American,” direct them to the homepage of Elevation Wine Partners’ website. There, they’ll see a quote from a rather famous American, Benjamin Franklin. (We learned in school that he was a patriot, but who knows anymore). Anyway, here is the quote attributed to old Ben: “Wine is proof that god loves us and wants us to be happy.”
Where is the outcry over this? Where are the pitchforks? I would love to hear you weigh in, dear readers!
