Wine and Beer Exports and Tariffs

S.W. and Rich Hermansen
Guest Writers
wine@lbknews.com

Wine and beer exports have taken on the curious roles of bellwethers of the impact of tariffs on exports. During the latest round of globalization of businesses, the proportion of wine exports in global wine sales has increased from 10% in the 1960’s to 42% in 2022. (Source: Food and Agricultural Organization of the United Nations Global Trade Atlas.) This means that wine producers in many countries depend heavily on wine exports to pay their operating expenses, and that, due to the close ties of wines to regions within countries, tariffs on wine imports will force buyers in the USA to pay even higher prices than before for a Port or a Malbec or a Champagne or any other wine not produced in sufficient quantities in the States. In Washington DC, the same politicians who have enshrined the idea of free enterprise are now playing politics with tariffs. Imposing a 25% tariff on Mexican and Canadian imports to retaliate against lax control of illegal immigrants and smuggling of Fentanyl seems more likely a backlash against imported beer as a favor to Budweiser. Recall Trump’s tariffs imposed on French wines during his prior tenure.
Tariffs on wine and beer imports have a much greater negative impact on the small producers that use traditional and more sustainable farming practices. The much larger producers will simply press more of the cheaper grapes and add doctored juice to their mass market wine. Further consolidation will reduce the diversity of distinct tastes of wine and beer. Perhaps this result becomes another example of what happens to those who try to raise standards of living in less prosperous and weaker countries. The chaos of trade wars inspired by pollical factions makes a mockery of the ideal of a free enterprise economy.
It may be a good time to stock up on wine imports before tariffs take effect. French wines will likely be an early target of Trump Admin II. Look for good prices under $50 on Piper-Heidsieck Brut and the elegantly structured Billecart-Salmon with close to a 50% blend of the third Champagne grape after Chardonnay and Pinot Noir, Petit Meunier, at a price range around $90.
Wine prices of imported and domestic wines are increasing with or without tariffs, so having a few bottles tucked away will help bridge spikes in prices. Rhône Valley wines such as the 2017 Château Gigognan Bois des Moines Côtes du Rhône Villages ($24) and the 2023 “Luberon”, Legende de Bonpas ($16) will coexist well with California Cabs and Oregon Pinot Gris.
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Tariffs on beer and wine will cause hardships among small farmers, wineries, and breweries both here and abroad, favor large corporations, raise prices, and limit consumer choices. Anyone paying attention will see how politicians use them to their own advantage.
S.W. Hermansen has used his expertise in econometrics, data science and epidemiology to help develop research databases for the Pentagon, the National Institutes of Health, the Department of Agriculture, and Health Resources and Services. He has visited premier vineyards and taste wines from major appellations in California, Oregon, New York State, and internationally from Tuscany and the Piedmont in Italy, the Ribera del Duero in Spain, the Barossa Valley and McLaren Vale in Australia, and the Otego Valley in New Zealand. Currently he splits time between residences in Chevy Chase, Maryland and St. Armand’s Circle in Florida.
Rich Hermansen selected has first wine list for a restaurant shortly after graduating from college with a degree in Mathematics. He has extensive service and management experience in the food and wine industry. Family and friends rate him as their favorite chef, bartender, and wine steward. He lives in Severna Park, Maryland.