a 100% tariff will devastate the wine industry

From John, January 19th, 2020

The use of tariffs has become a defining reality in American economic life. Many things have become more expensive due to the wide range of items being taxed.  For example wine bottle glass is more expensive, even American-made glass, because manufacturers can now raise their prices in response to the rise in price of foreign glass. Specialty items manufactured overseas such as French cheese and Scotch and Irish whiskey are arbitrarily hit with tariffs even if there is no comparable product made here.

But all of this pales compared to the latest threat of 100% tariffs on French and European wine.   The 25% tariff implemented on French still wine in October has already unsettled the wine market in the US.  It has succeeded in reducing overall sales of wine in the 4th quarter compared to previous years.  A 100% tariff will literally kill it.

Sales of Oregon wine are miniscule compared to that of European wine. Wine retail shops and distributors and restaurants around the country depend on sales of the latter to run their businesses. We therefore “ride on the coattails” of European wines in order to move our product. With a doubling of import prices, I expect that many importers and distributors will fail within a year. Already there is very little wine in transit from Europe due to the uncertainty of the situation.  All of this is elegantly explained in a recent article by Oregonian/OregonLive author Michael Alberty.

While I pride myself on making Pinot noir and Chardonnay in a strictly Burgundian tradition that often tastes like “the real thing”, Abbey Ridge is not Volnay and Clos Electrique is not Chambolle. Nothing can replace the legendary wines of Burgundy.

We are all the losers if Trumps’s 100% import tariff comes to pass.

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