Although the Trump administration’s rationale for imposing massive tariffs on various imported goods vary by the hour, one of its key arguments is that such tariffs would bolster U.S.-based industries. California, of course, is one of the top wine producers in the world. Although only a state, it only trails the countries of Italy, Spain and France in wine production.
Nevertheless, the industry here is troubled by plans to impose as much as 200% taxes on wines from those and other countries. The Wine Institute, an association that advocates for the industry, supports the “fair, open and reciprocal trade of wine around the world.” It argues, “Retaliatory tariffs like those currently in place invariably harm U.S. wine producers and impede the growth of the wine industry.”
Some individual wineries argue that tariffs might help them compete with imported wine, but overall the industry knows that such tariffs invariably invite retaliation. As AP reports, wineries also fear tariffs will increase the cost of wine-making supplies including barrels and bottles. The wine industry already is suffering because of inflation and dropping wine consumption.
Wine importers often are a forgotten part of the equation. Per Axios, Californians bought a half-billion dollars in French wine last year. If the tariffs go into effect, the entire industry “will take a huge economic hit down the chain, affecting not only importers, but also distributors, retailers, restaurants and any business that sells imported wine.” Most are small businesses.
The wine industry has skin in the game and knows the likely harm. We’re focusing on this one industry here because of its impact on California’s economy and consumers—and close-to-home examples illustrate broader points. The best reasons for free trade center on freedom, of course. Businesses and consumers should be free to trade with whomever they choose without facing punitive taxes.
Tariffs are taxes. Period. This Editorial Board has consistently opposed tax increases. Like many Californians, some of us also enjoy wine and appreciate the benefits this industry provides in our home state. It’s time for the administration to stand down.
