As someone who owns his share of businesses in the hospitality space, President Donald Trump might be expected to be sensitive to, let alone supportive of, the restaurant and wine industries. Yet one of Trump’s last acts as President has been deliberately and undeniably punitive to both.
Yes, I’m talking about the 30 December 2020 announcement that extended his October 2019 25% tariffs to French and German wines over 14% alcohol (not that there are many German wines over 14% …). But while unexpected, the imposition of the tariffs themselves is not the egregious act. Certainly, American businesses and their customers will feel the sting of an additional 25% price increase on their favourite Châteauneuf-du-Papes. But the insult that has been added to this injury comes in the form of the deliberate and conspicuous absence of what is known in the business as a ‘goods-on-the-water’ exemption. The conscious omission of this clause for a set of tariffs that go into effect within weeks amounts to nothing short of a stab in the back to the already ailing wine trade and hospitality business.
The tariffs themselves continue to be a problem of course. Since 18 October of 2019, US importers have been paying a 25% tariff on all French, German, Spanish and British still wines under 14% alcohol. The impacts were significant and severe.
‘We spent more than $2 million paying tariffs last year that we would have preferred to spend on buying more wine’, says Harmon Skurnik, partner in New York-based importer Skurnik Wine & Spirits.
According to data collected by fine-wine traders at Liv-ex, these tariffs significantly reshaped the fine-wine market. Their end-of-year report on the subject showed a 30% and 38% drop in Bordeaux and Burgundy’s respective shares of the US market.
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Photo of Crafter’s Brewing “Bubble in The Head IPA” by Jon Parry