U.S. Consumers Paid More Than the Tariff Cost on European Wines
A study from Duke University’s Department of Economics found that U.S. consumers ultimately paid more than the tariff amount on European wines during the 2019–2021 trade dispute. This means American consumers bore higher costs than the federal government collected in tariff revenue.
Researchers examined wine tariffs using both public data and private data from a large wine importer. The National Bureau of Economic Research published the findings.
When a 25% tariff was applied to wines with 14% alcohol or below, foreign producers reduced their prices by about 5.2%to remain competitive. However, importers in the U.S. raised their prices to distributors by around 5.4%, absorbing some of the tariff cost. Retailers then added their usual markups.
By the time bottles reached consumers, prices had increased by 6.9% overall. This meant that American buyers paid about $1.59 more per bottle, even though the actual tariff collected by the government was only $1.19 per bottle.
The research showed that importers’ profit margins were squeezed, and consumers still paid more despite foreign producers lowering prices. Because tariffs are applied when goods enter the country—before wholesale and retail markups—total consumer cost increases ended up exceeding the government’s tariff revenue.
Although the study focused on wine, the researchers suggested that similar effects could apply to new tariffs on goods such as steel, copper, aluminum, automobiles, and auto parts, which have been expanded since 2025.
A separate report by Goldman Sachs estimated that American consumers pay about 55% of tariff costs, U.S. businesses pay 22%, and foreign exporters pay 18%.
The wine study also discovered evidence of “tariff engineering,” where producers adjusted wine labels—such as increasing reported alcohol content above 14%—to avoid the 25% tariff.
Finally, researchers observed that it took nearly one year for higher retail prices to reach consumers after tariffs were imposed, and prices stayed elevated for about a year even after the tariffs were removed.
