As a trade war brews between the US and EU, wine is at the heart of a high-stakes standoff with global consequences for drinkers and producers alike.
What’s happening: The EU wine industry is bracing for potential US tariffs as high as 200% on European wines, champagnes, and spirits. The move, a response to EU plans to tax American bourbon, has already caused U.S. importers to freeze shipments, costing European producers an estimated €100 million per week. Meanwhile, California winemakers see a possible silver lining: higher prices on European wines could steer American consumers toward domestic bottles.
The background: The U.S. imports 30–40% of its wine, much of it from Europe, making the U.S. a vital market worth nearly €5 billion for EU producers. However, the global wine industry faces bigger issues—declining consumption, oversupply, and changing drinking habits, especially among younger generations. California has already ripped out 26,000 hectares of vines since 2022, with more reductions needed. While tariffs might offer a temporary market advantage, experts warn they won’t solve structural problems in the industry.
Why it matters: Tariffs risk raising wine prices for American consumers and damaging both EU and U.S. wine sectors. European producers fear long-term loss of market share, while American industry leaders warn tariffs could hurt importers and reduce consumer choice. Both sides are lobbying to keep wine out of the trade crossfire. The EU may delay its own retaliatory tariffs in hopes of reaching a deal. For now, both continents are caught in a wine war that could leave everyone with a hangover.
What to watch: Talks between the EU and the U.S. are ongoing, with European countries like Italy, France, and Ireland pushing to exclude wine from the dispute. The EU’s trade chief Maroš Šefčovič has hinted at aligning countermeasures to allow more time for negotiation. Meanwhile, U.S. domestic tensions add complexity—California, a Democratic stronghold, produces the majority of American wine, meaning Trump’s tariffs could have political consequences at home. Also in focus: a loophole allowing U.S. producers to label bottles as “American wine” despite blending in up to 25% foreign grapes, which may face renewed scrutiny if tariffs take effect.
