For almost 20 years, City Winery has thrived importing wine and bulk putting in stainless steel kegs and selling it by the glass. President Donald Trump is threatening to ruin that business strategy, especially if a trade war erupts between the U.S. and Europe.
Winery founder and CEO Michael Dorf says that if tariffs as high as the threatened 200% on European wines are imposed, he will have to import wine from elsewhere because what he would have to charge for European wines would be too expensive for his customers.
“Our producer friends who make finished wine in France need to go through an importer and sell to us as finished wine,” said Dorf. “With now a large tariff on it, obviously if we choose to just buy it, it’s going to be very expensive, and it won’t be very competitive.”
Dorf’s difficulty illustrates the enormous impact tariffs could have on the U.S. wine industry, particularly wineries that import bulk wines and grapes. The 200% on European alcohol, could make foreign wine imports prohibitively expensive, forcing wineries to absorb the cost or pass it to the consumer. With consumption already declining and exports facing pressure, some wineries have to deal with potentially losing markets in Canada. Others struggle to maintain both quality and profits.
“The winery is going to have to eat some of that cost as the buyer,” said Dr. Robert Eyler, professor of economics at Sonoma State University in California wine territory, whose research focuses on the industry. “They are going to try to pass that on to consumers, which would also have some problems with demand. And right now the wine industry is in a state that they don’t want to push demand away.”
Since returning to the White House in January, Trump has repeatedly announced, then paused, tariffs on imports from Canada, Mexico and China while also threatening the European Union — shaking markets, straining diplomatic relationships and creating uncertainty for businesses.
On March 13, Trump’s 25% tariff on steel and aluminum took effect and the European Union retaliated with a 50% tariff on a list of American goods, including wine. Trump quickly threatened a 200% tariff on European wine.
City Winery imports grapes and bulk wine from all over the world. All its rosé wine come from France and its sparkling Cava from Spain. “I’m not happy about it,” said Dorf. “Nobody needs this.” Referring to Trump, he added, “My joke of ‘Make America grape again’ is because I think he’s potentially ruining the world.”
Whether the wine comes from France, Italy or Texas, the United States remains a major wine-consuming country, even though consumption has declined over the last decade, except for the pandemic years, when it temporarily increased. Sixty-six percent of the wine consumed is produced in the U.S.
Winemaking is a multi-step process that often involves multiple countries. While some wineries produce their wine entirely on American soil, many rely on grapes from France, Italy, Argentina and other countries, others on bottles from China or Germany or corks from Portugal.
“The wine industry is a little unique in the sense that there’s a culture around using specific types of wine or grape juice inside of the bottles,” Eyler said. “To deviate from that, and instead of using wine that’s imported from France or Italy, now you’re importing it from Texas. Winemakers might wonder whether or not that would change the nature of the wine.”
This applies to grapes, bulk and finished wines. For Thierry Pradines, owner of the Best Wine Purveyors store in Pleasantville, N.Y., no U.S. wine is a substitute for any international wine. “If you like Sauvignon Blanc from New Zealand, they have a certain taste that cannot be replicated in California,” he said. “If you like a wine from Bordeaux, which is Cabernet Merlot, they have a specific taste that cannot be replicated.”
As wineries grapple with the uncertainty, industry leaders are considering how to mitigate the impact while maintaining profits. Larger producers in the U.S. import bulk wine, blend it with local wine and label it American wine, said Rob McMillan, executive vice president and wine division founder at Silicon Valley Bank. He said this practice could help growers in California’s Central Valley increase their revenue if local wineries stop importing bulk wine because of tariffs. But he added that tariffs would severely damage wineries that rely on exporting their product, especially to Canada, where, over the last month, some provinces have removed American alcohol from their shelves in reaction to Trump’s tariffs.
“For those specific producers that sell there, that’s a big deal,” said McMillan. “They lose all their sales. And it’s not just wine. It’s spirits, beer and anything else in the alcohol category that is imported from America.”
During the pandemic, restaurants were allowed to sell alcoholic beverages and bottles to go, as a way to ease the pain in one of the most affected sectors of the economy. But that policy took away the competitive advantage to businesses like City Winery, slowing their recovery.
Since the pandemic started five years ago, Dorf said of City Winery, “we didn’t have a good year until last year, 2024. I think we’re a little concerned about 2025.”