Trump tax on wine. What's coming next?

The US is one of the world's largest consumers of wine, which has shaken wine imports due to threats of tariffs since March, "reciprocal tariffs" of 20% on all European products introduced on April 2nd, followed by a 90-day delay on 10% of US tariffs on European products and, on May 23rd, additional 50% tariffs on European products starting June 1st.

At a time when the end of trade negotiations between the European Commission and the United States is approaching next Wednesday (July 9), Portuguese exporters of wines and spirits still do not know how they will be affected: 50% or more from August 1st, maintaining the 10% as since the beginning of April, or even a drop to 0%.

Recently, negotiations took place between China and the US, resulting in an agreement for the Chinese to supply rare earth minerals to the US. In return, the US will withdraw certain countermeasures, such as the ban on exports of alcohol, semiconductors, and aircraft engines to China.

An agreement between the US and India, and also between the US and Australia, is also foreseen. It is certain that the US will always seek to benefit in economically strategic sectors, such as rare earths, steel, and the import of American natural gas by Europeans.

Current landscape of "partnerships" between the US:

Partnership	Current Situation	Key dates	Wine Component
China	Truce: tariffs reduced to 10% in May; agreement finalized in June.	May 12, 2025 – start of the truce (90 days) June 11, 2025 – agreement	✅ US wine tariffs dropped from 125% to 10% → strong return to the Chinese market
EU	Fares suspended until July 9th; proposed flat rate of 10%; no definitive confirmation.	April 2025 – imposition of tariffs; July 9, 2025 – deadline.	European wines included as sensitive products; impact still uncertain.
India	Negotiations are underway for a "mini-agreement" (~10% tariff); temporary suspension until July 9th.	April 2025 – proposed tariffs; July 9, 2025 – end of suspension.	❌ Wines are not the focus of the agreement; no direct impact is expected.
Australia	The US has applied a 10% tariff to all products (including wines) since April; additional tariffs suspended until July 9; negotiations are underway for exemptions, including for wine.	April 2, 2025 – “Liberation Day” announcement (10%) April 5, 2025 – effective until July 9, 2025 – suspension of additional fees	✅ 10% tariff on Australian wines (previously exempt); industry considers measure "disastrous"

While the outcome of these constant changes, in a kind of economic war , remains unknown , the wine sector ends up being shaken, causing exporters to temporarily freeze orders. This does not help the wine industry, which is currently in crisis and only has a "breath of fresh air" thanks to on-site wine tourism experiences, and which is trying to rebalance the supply and demand for wine.

Today, companies in the sector have stopped producing in order to enhance the value of wine "in the long term" because:

There are bills to pay.

- Consumers no longer have the economic power to buy high-value wines.

Companies are still trying to understand the changes in consumption patterns among new generations, as storing wines for longer periods in cellars, barrels, vats, or bottles results in more complex, tannic, less fruity, and less fresh wines, which goes against the trends of these new consumers. Therefore, most companies have opted to produce wines for quicker sale rather than wines that age for hundreds of years as in the past.

Furthermore, storing wine for longer periods requires more space, and space costs money. Small grape producers need to be paid for their wines, and if they have their own grapes, the costs of labor, pesticides, and fertilizers are increasingly high.

Along the way, some chose to diversify excessively . In the Portuguese case, this became:

. to produce single-varietal wines, something that contradicts the profile of the Portuguese consumer accustomed to blended wines.

. to create wines using ancestral techniques (amphora, clay pot, among others) in regions whose tradition has never been linked to this.

Integrating new grape varieties into regions where they originated far away (such as Alvarinho and Encruzado in the Douro) disrupts the wine-growing culture, traditions, and the characteristic terroir of a particular region.

. to distill products, thus adding gins to its portfolio.

Everything was done to create "new" products, and they ended up competing with each other. The excessive diversification even caused the producer to compete with itself by distancing itself from its origins and identity.

We'll see what happens, but I believe the industry is going to go through a rough patch in the next 3-5 years.

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WRITTEN BY:

Pedro Fernandes

Pedro Fernandes is a Portuguese winemaker who has been involved in viticulture since he was 11 years old, where he started making his first wines with his father and doing tasks such as pruning.

Since then he has never stopped and in 2018 he decided to dedicate himself to the wine sector, starting by doing "everything backwards". He began by taking wine specialization courses such as WSET (Direct Wine) and Wine Expertise (ISAG) in 2018/2019. Then he graduated from the University of Nebrijia in Madrid, obtaining an MBA in Oenology (2020). In 2021, at the age of 39, he decided to pursue a Bachelor's degree in Oenology (UTAD), and against all odds, he finished the course in 2024.

Along the way, he created his first personal wine brand - Chãos - and completed an internship at the prestigious Chateau Latour (in Bordeaux).

Currently, he works as a consultant in the wine sector, where he plays a role not only as an oenologist, but also in creating business strategies for wine producers, with a current vision of the market, which includes resources from Digital Marketing and Wine Tourism.