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Trump’s Wine Tariffs and Their Consequences

Last week, the US government announced 25 percent tariffs on certain European products including wines from France, Spain, and Germany. There are some notable exceptions to the tariffs including Italian wine - a possible result of the Trump administration’s kinship with Italy's right-wing government - along with wines above 14% alcohol by volume, a move that may lead to changes in harvest times and production methods in the EU. A number of other European products are subject to the tariffs including cheese, olive oil, and spirits such as Single Malt Scotch. The tariffs are scheduled to take effect on October 18.

On the heels of this announcement, we received notifications from prominent national distributors and retailers that all pending purchase orders from Bordeaux would be placed on indefinite hold. After consulting with industry leaders across the country, it became clear that fine wine imports from Europe - and by extension the Bordeaux futures market - are headed for a freeze. Consequently, we believe that traditional retailers will be soon supplanted by auction houses and brokerage companies like ours as the leading dealers of fine European wine in the United States. Meanwhile in Europe, producers are already reeling from the blow of Brexit, causing California winemakers to fear that these new tariffs will result in retaliation against the American wine industry. We will continue to monitor this situation and will post updates as new developments occur.