Wine's Taxing Year.
Trade · Policy · The Bottle
The Tariff Wars Come for Your Wine Glass
How a 15% duty on European bottles survived a Supreme Court defeat, quietly rewired the American wine trade — and why you're paying more for that Sancerre than you think.
On a Friday morning in February, Victor Owen Schwartz watched his fate arrive over Zoom. His company, V.O.S. Selections — a family-run New York wine importer he started in 1987, sourcing bottles from 16 countries across five continents — had somehow ended up as the lead plaintiff in a case against the President of the United States. When the Supreme Court ruled 6–3 that Donald Trump's sweeping "Liberation Day" tariffs were unconstitutional, Schwartz was sitting at his dining room table with his wife. "It's impossible to describe the feeling of elation," he said afterward, "of seeing that, yes, we were right, and the court agrees with us."
The wine trade's celebration lasted about a day. Within hours of the ruling, the White House announced a replacement 10% global tariff — and a day later raised it to 15%. Eight months on, the tariff wars haven't ended. They've simply changed legal address.
It's impossible to describe the feeling of elation — of seeing that, yes, we were right.Victor Owen Schwartz, V.O.S. Selections
01 — How We Got Here
Wine has been caught in transatlantic crossfire before — the EU's retaliatory tariff on American whiskey back in 2018 put the drinks industry at the center of a steel-and-aluminum dispute it had nothing to do with. But the second Trump administration turned skirmish into siege. After returning to office in early 2025, the White House floated tariffs of 25%, 50% — at one point 200% — on European wine and Champagne.
The April 2025 "Liberation Day" package, imposed under the International Emergency Economic Powers Act, hit nearly every U.S. trading partner. By July, after threats of a 30% duty and frantic negotiation, Washington and Brussels struck a deal: most EU exports to the U.S. would face a 15% tariff — and despite furious European lobbying for a "zero-for-zero" carve-out, wine and spirits were left in. "It is a dark day," French Prime Minister François Bayrou wrote of the accord, "when an alliance of free peoples... resolves to submit."
Then came the courtroom. Schwartz, recruited by the Liberty Justice Center, joined a group of small businesses arguing that IEEPA — a 1977 sanctions law — never gave presidents the power to levy tariffs at all. The Supreme Court agreed, 6–3. But the administration pivoted immediately to Section 122 of the Trade Act of 1974, and the 15% tariff marched on under new statutory cover.
02 — The Math Nobody Tells You
Here's what most tariff coverage gets wrong: a 15% tariff is not a 15% price rise. America's post-Prohibition three-tier system — importer, distributor, retailer — applies a percentage markup at every step, compounding the duty as it travels to the shelf. A landmark NBER working paper tracing earlier wine tariffs found that on a bottle entering the U.S. at $5, a 25% tariff generated $1.19 in government revenue — but cost the consumer $1.59, with retail prices taking a full twelve months to absorb the shock and staying elevated nearly a year after the tariffs expired.
In practice, European wines are now commonly 15–25% more expensive than a year ago. The pain lands hardest in the $15–$50 mid-range — precisely the band where curious drinkers live, and where importers quietly cut niche, small-production listings first. It matters because of scale: European wines account for roughly 16% of total U.S. wine volume and 24% of revenue.
03 — The Squeeze Arrives
For much of 2025, drinkers were sheltered. Big importers front-loaded inventory — Wilson Daniels hedged with $60 million of European stock — and many distributors chose to take it on the chin rather than lose accounts. That cushion is gone. "A big amount of wine was digested by the market, so there is not a huge inventory here anymore," says Lamberto Frescobaldi, president of Marchesi de' Frescobaldi. As one New York importer puts it: "If somebody hasn't raised prices by now, they're closing down shop."
For small importers, the mechanics are brutal. Tariffs are paid up front, at the port, before a single bottle is sold — in an industry where a 5% net margin counts as a good year.
A tariff is a cash flow killer. Cash flow is the lifeblood of a company.V.O.S. Selections, to the Italian Wine Podcast
Restaurants feel it three ways: by-the-glass programs built around $10–12 pours can no longer hold their price points; lists are losing the small European regions that gave them character; and guests are seeing 5–15% increases on bottles and glasses alike. And the retaliation has been worse than the tariff itself in at least one market: American wine sales to Canada — historically the largest export destination for U.S. wine — collapsed by 91% in the second quarter of 2025 as provinces pulled American bottles from liquor store shelves.
04 — What Happens Next
Three clocks are ticking, and each will decide what the next bottle costs:
- 01The refund fight. With the IEEPA tariffs struck down, importers are pursuing repayment of duties collected under the invalidated authority through the Court of International Trade — a process that could take years of litigation.
- 02The Brussels push. In July, the European Commission formally asked Washington to reduce or remove the 15% tariffs on wine and spirits — alongside olive oil, pasta and French cheeses — under the trade framework that took effect July 1.
- 03The redrawn map. Analysts at IWSR predict that if tariffs persist, American buyers will shift toward Chile, Argentina, Australia and New Zealand, with domestic producers in Oregon and Washington picking up the substitution demand.
Schwartz, for his part, is philosophical about the money he may never recover. "Even if it's spilled milk," he told NPR, "just to have the ability to move forward without tariffs, that would be a major, major victory." Asked what he drank the night of the ruling, he didn't hesitate: an old bottle of Châteauneuf-du-Pape from Domaine du Banneret — French, aged, and worth every tariff-inflated penny.
