Buy Now! These Prices Won't Last!

There's a lot of discussion happening over wine is regulated in the US and rightfully so. A compelling case can be made that the 21st Amendment adds substantial regulatory complexity and expense to an industry that already suffers from low margins and a minimum viable scale to operate. But what of the regulatory mechanisms outside of the 21st Amendment that add expense and barriers to entry for wine into the United States? What about tariffs?

As hard as it is for winemakers to get their products into the US with the existing complex system, it at least is understandable and manageable. Unfortunately, wine is an extraordinarily culturally relevant symbol and, as such, is on the front lines when it comes to trade negotiations. On Oct 18, 2019, the Trump Administration, as part of a dispute over Airbus, levied a 25% tax on wine (under 15% ABV) from France, Spain, Germany. [1] Further, an additional 100% tariff on all wine from the EU (ALL WINE!) has been threatened. These tariffs have started to have been reflected and importers are even limiting how many new bottles they import, hoping to outlast the tariffs. For their part, the EU has levied tariffs on iconic American beverages like Jack Daniel's Tennessee Whiskey, although in this case producer Brown-Foreman prefers to absorb the cost at least in the short-term. [2] However long the trade dispute lasts, this is likely not the last time that the global wine market will be disturbed due to it's prominence in the cultural transfer of the global economy. Wine means represents culturally significant in the way that a component in an iPhone does not and an attack the wine industry is, by proxy, an attack on the soul of the economy that produces it.

Sources:

[1] https://www.nytimes.com/2020/01/30/dining/drinks/best-wines-under-20-dollars-winter.html?smid=nytcore-ios-share
[2] https://www.cnn.com/2019/12/05/investing/brown-forman-earnings-jack-daniels-tariffs/index.html