Donald Trump, like his predecessor — what’s with these clowns? — does not drink wine.
I think he makes wine, or puts his awful brand on some juice out of Virginia, but he wouldn’t know a Burgundy from a Beaujolais.
But he knows how to tax the hell out of those fine bottles, and so, like any other tax-happy politician, he does.
You know by now, here in the economic dystopia that is Tariff World, that a tariff is ultimately a tax on consumers — you and me — and not on producers of products that happen to be made in any other country.
And you know from Trump 1.0 that tariff is the current president’s “favorite word,” which is like saying your favorite word is “excrescence,” or “smog,” or “bile.”
As of Aug. 1, Trump imposed a 15% tariff on all wines and spirits — along with everything else — made in the European Union.
It’s not just that all kinds of stuff from every country in the world is costing someone more, a plain fact that sellers are having to pass on to buyers after a few months of just sucking it up themselves.
It’s that the tariffs are fueling inflation, which had been heading in the right direction — down — since mid-2022. Since Trump’s inauguration, inflation has been heading back up. Consumer prices in the United States rose 2.7% in June from a year earlier, a larger increase than the previous month.
You might think that California wine makers would, selfishly, welcome a 15% new tax on European wines, as it would give them a pricing advantage. But you would be wrong, since consumer economics is much more complicated than that. (“Complicated” is not Trump’s favorite word.) Because here’s the thing: winemakers understand that wine-drinking begets wine-drinking. Once you’ve developed a taste for, again, Beaujolais, made in France, you become curious about what a California wine made from the same grape, gamay, might taste like. Cut down on the chances to explore that curiosity, and you likely cut down on wine-drinking altogether. People just turn to cocktails, or to beer.
And the odd thing is that medium-good to great California wines already cost more, pre-tariffs, than comparable wines from the EU. I drink mostly wines from Italy, France and Spain not because I harbor any anti-Golden State sentiment, but because real estate and labor costs make quaffable California wines cost too much.
(Fantastic) Cain Vineyard & Winery co-manager Katie Lazar in the Napa Valley said in a recent media briefing: “We’re a long-term business,” noting that growing grapes and making wine takes years. “It takes (the wine industry) so long to react and be able to change that the chaos that is present now is an existential threat to the world that we live in.”
“Winemakers like Lazar say the distributors they rely on to sell their wines need revenue from selling European wines as well. Their ability to distribute domestic wine is tied to how much other wine they have coming in,” she said in an interview with CalMatters, the nonprofit news site.
“I’ve never felt so interconnected like I feel now, even with competitors,” said Matt Licklider, proprietor of (fantastic) LIOCO in Healdsburg. His winery has about 40 different distributors, “some of which didn’t know whether they would have revenue coming in from imports because of the unknowns around tariffs. So some of those distributors are ordering less from him,” Calmatters reports.
“It has put distributors in a more conservative mindset, which doesn’t benefit anyone here,” Licklider said.
Businesses cherish certainty, not chaos, and those who sell wine say they just hate not being able to know what is coming next.
“People up and down the supply chain are in trouble,” Bay Area restaurateur Paul Einbund said. “We were getting emails saying ‘pre-tariff pricing,’ but that’s dried up now. European producers are not selling to Americans right now.”
The kick in the head, he adds: “European buyers are not buying American wines right now.” Just awaiting economic sanity.
Larry Wilson is on the Southern California News Group editorial board. lwilson@scng.com.
