What Will Trump’s ‘Liberation Day’ Tariffs Mean for The Beverage Industry?
President Trump’s self-proclaimed “Liberation Day” and its associated tariffs are here. After weeks of vague messaging about exactly what will unfold, the president finally made an announcement today in a ceremony at the White House Rose Garden — which Trump ironically plans on paving over.
In his speech, Trump called the event “our declaration of economic independence” and described it as one of the most important moments in American history before revealing the tariff plans on a chart that he held on stage. The chart displayed a list of countries with the tariff rate they each charge on U.S. goods in one column and the corresponding tariff that the U.S. will implement in response. This will include a 20 percent tariff on the European Union, 10 percent on the U.K., and 24 percent on products from Japan.
Trump also said he plans to establish a universal baseline tariff of 10 percent. It appears this will apply to all countries, in addition to the numbers he’s already announced. And this is in addition to the 25 percent tariff he had announced earlier on cars and auto parts imported into the U.S. that will go into effect just after midnight tonight.
These “reciprocal tariffs” are meant to “roll back the unfair trade practices that have been ripping off our country for decades,” according to a statement from White House press secretary Karoline Leavitt. Though Trump insists that the tariffs will help bolster the American economy, the reality is that this aggressive economic plan likely spells trouble for most U.S. businesses.
One sector that’s particularly vulnerable to the impact of the tariffs is beverage alcohol. Over the past several months we’ve seen Trump seek retaliatory measures on products from Canada and Mexico, as well as threaten a 200 percent tariff on European wine and spirits in response to the European Union’s proposed 50 percent tariff on American whiskey.
While it isn’t 200 percent, the actions Trump announced today will likely have a large impact on the industry, particularly the 20 percent tariff directly applied to the European Union. Notably, the chart that Trump presented on stage did not show any additional tariffs for Canada and Mexico, though the countries have been targeted by other, more specific initiatives.
Trump said his tariff policies would generate “trillions and trillions of dollars to reduce our taxes and pay down our national debt,” despite the fact that experts agree the cost of tariffs are overwhelmingly passed on to consumers.
From importers and distributors to retailers and restaurants, the entire industry is bracing for the fallout of these new regulations. We asked beverage professionals how the new tariffs will impact their businesses, read on to see what they said. This is a developing news story and we intend to update with commentary from industry professionals on a rolling basis.
“Today is another unfortunate and frankly devastating step in the new economic experiment by the current administration. The varying tariff rates are restrictive and backbreaking taxes to be paid directly by the consumer of wine. The various falsehoods that have been tossed out — that people will move to domestic wine and that the exporter will lower their asking price to factor in the tariff — are not rooted in reality. The pain and damage here is serious.” —Chase Sinzer, owner Claud and Penny, NYC
“As an importer, we’re skating on paper thin margins as it is. In the past few weeks, shipments have more or less stopped from Europe, already resulting in what I’m sure is billions of dollars in losses for American importers, European and eventually American winemakers, as well. Their wines are often more expensive than their European counterparts and many importers and distributors are able to continue to support American wine by supplementing the margins with cheaper European imports. As a buyer for Rory’s Place, my goal is to give people everything they want and don’t know they want yet in the most dynamic and approachable way, which means that the list has wines from as close as Santa Barbara and as far as New Zealand and Georgia. The tariffs impact our ability to offer that range and change the fabric of the restaurant as we know it.” —Roni Ginach, importer and wine director, Roni Selects and Rory’s Place, Ojai, California
“These new tariffs announced today will only worsen an already challenging environment in the U.S. for its wine and spirits industry. The burden will fall first and foremost on American companies, starting with importers, who are the ones actually paying these tariffs to the federal government, despite the widespread misconception that they’re paid by foreign suppliers. The impact will ripple through the entire U.S. supply chain: distributors, retailers, restaurants, bars, and ultimately consumers. These tariffs will penalize American businesses and threaten jobs across our industry here in the United States.” —Jean-François Bonneté, founder and CEO, BCI Wine and Spirit Imports
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