Canada’s break from US-made wine and Trump’s administration’s global tariffs exacerbated the struggle of the already stressed wine industry in the United States.
“Canada is the most important export market for US wines with retail sales of over $1.1 billion a year,” said Robert Koch, president and CEO of the California Wine Institute, in a statement.
Last month, Canada unites to boycott American wine – all US-made vino and alcohol from the shelves of liquor and wine shops, and as a positive retaliatory response to Trump’s tariffs on political allies north of the border.
The boycott began in Ontario, with all other provinces responding in physical form. When Manitoba Prime Minister Wab Kinue announced that his territory would ban American wine and alcohol, he chuckles to Trump to sign an executive order on social media videos.
“This order, it’s a great order, it’s a beautiful order,” Keene said sarcastically. “This order pulls American liquor off the shelves of the liquor market,” his staff lined up behind him praised him, holding up the order to see everyone.
It is the key to the people’s pride that they do not buy Americans. Kaiser said the tariffs “their people are now motivated.”
This result could be devastating for the US wine world.
“We understand the reasons behind some of these tariffs,” said Mike Kaiser, vice president and director of executive management for the Wine America Government, a group defending Wine Industry Policy in Washington, D.C.
His industry was “engulfed in the crossfire” of the trade war, and even if tariffs were reversed tomorrow, “psychological damage with consumers could be really difficult to return, even if these disputes were resolved.”
He added that some export winemakers “may be able to absorb this tariff.” But “we lose $1 billion a year as it is already an unsold wine in Canada, and we’re shaking the domestic wine market from top to bottom here.”
The White House did not respond to requests for comment on the impact of tariffs on the wine industry. The Ontario Liquor Commission, which manages alcohol sales and distribution in Canada’s second-largest province, also did not respond.
Before Trump issued tariffs on other countries, the American wine business was already facing headwinds. “We’re struggling,” said Christie Coors Fisselli, CEO of Goosecrossellers in the Napa Valley of California.
After the Covid-19 pandemic, wine consumption has declined in the US, sales have been soaked, and winery visits have not been consistent.
Alcohol-based drinks like white nails and noon have become popular alternatives to wine, Fiselli said.
Furthermore, in January, US surgeon General Vivek Murthy suggested that even small amounts of wine could be harmful, Ficeli believes it drove the drinkers. Finally, the cost of wine – to buy it and visit the winery – increased due to inflation and, in some cases, wineries trying to make up for slowdown.
“It’s become quite expensive for tourists to come here,” Fiselli said.
Wanda Newman Johnson, a frequent Napa Valley visitor, said the tariffs put her in “standby mode” about whether or not she would continue to ship her wine to her Atlanta home.
“I really feel bad because many of these wineries are small businesses at the heart of the country,” said Newman Johnson, who has memberships at Brown Estate and Turnbull Wine Cellar in Napa. “They are affected and hurt. They don’t know how some of them can survive the tariffs.”
Fiseri also said Napa has become more affordable to visit in recent years. “A lot of us had to raise prices because after Covid, the pricing was insane, especially to get glass,” she said.
Most wineries import bottles from China, she said. Prices shipped from China increased by “doubling or tripling” pre-Covid amounts. “So most of us did the price increase just to cover the rising costs,” she said.
However, Trump’s 145% tariff on China has launched a 125% tariff on China-made products that have entered the US, so getting bottles from Asia is curtailing costs. A financial quagmire has emerged as American wineries put 10% tariffs on European imports buying French oak barrels to grow wine and bottled corks from Spain.
“Some barrel suppliers say they eat tariffs, but last year they gave similar pricing and have increased slightly,” Fiselli said. “And some people say that barrel prices could rise by 15 or 20%. It requires a lot of handling, especially for a small winery like us, if you’re spending $1,200 a barrel.”
Fiselli said he was worried about the prospect that he would have to communicate the increase to customers “we don’t want to tear.”
However, tariffs affect the costs of bottles, barrels, and even corks. “It’s going to be a struggle,” she said.
And this struggle isn’t just in California, the country’s largest wine-growing region. For example, in New York’s idyllic Finger Lake area, if there are more than 100 wineries near Canada, the impact of tariffs is penalised.
Scott Osborne, owner of Fox Run Vineyards in Penyan on Lake Seneca, said Canada accounts for 10% of its sales. However, his winery fell 20% in Canadian businesses in March.
“Taxes will have a major negative impact on New York wine,” Osborne said. “Canadians come here, drink wine at our cafe and buy bottles with dinner. They don’t have wine back to Canada, but when they’re here, they enjoy it when they go back. It’s a big deal to not have that business.”
The tariffs angered Europeans “we’re canceling their trips here,” Osborne said. “When they don’t come here, it’s going to have a big impact this summer. And we’re worried. The damage is already happening. It won’t last for at least a year for my industry to recover.”
Osborne said a friend of Antwerp, Belgium, owns a wine bar specializing in American wine.
“Europeans wouldn’t buy American wine,” he said. “She has a palette of finger lakes wines that she can’t sell. It ruins her business.”
Kaiser said Wine America did not support tariffs and sued the case with Congress. “But the situation right now doesn’t have much of a capacity to restrain the administration from doing these things,” he said.
“We want them to target certain things if there’s tariffs,” Kaiser said. “We want the administration to work with other countries to make sure we are not targeted and we are not caught in the middle. That’s the biggest thing. If so, leave it to us.”
Kaiser said he and his organization are seeking in-person meetings with the office of US trade representatives.