Trumps Italian Wine Tariffs – What Do They Mean

As strange as it may seem, Donald Trump has actually featured in the pages of the Xtrawine blog in the past.

Toward the end of last year, Trump attracted out attention because of a rather contentious claim. He believes that American wines will always trump their Italian counterparts.

Now, we’re not looking to denigrate American wines here, by any stretch of the imagination. In fact, there are several wonderful wines that have emerged from the Napa Valley and other areas of California.

However, to say that one of the countries that has been an inspiration for what winemaking is in the modern age can’t measure up to the work of the Americans sounds somewhat facetious at best.

After all, many American vintages are copies of Italian (and French) originals. And we’d argue that the copies cannot beat the originals.

However, that debate is perhaps best settled for another day. The reason we discuss Trump is that he’s been wielding his influence as America’s President in other ways in recent months.

And what he’s trying to do right now could have a much more damaging effect in the Italian wine industry than random boasting about American wines every could.

Let’s find out just what he’s trying to do…

Tariffs For Everyone!

Trump has been building a bit of a legacy of imposing tariffs on the United States’ trading partners. We’ve already seen him use them in his negotiations with China, which has caused all sorts of issues in that country.

And now, it looks like he’s decided to turn his eye towards Europe and some of the products that the EU exports to America.

100% tariffs on all European wines.

That’s the proposal that Trump’s made. And much like with the tariffs in China, this is simply a case of the bully businessman using dirty tactics to try to get what he wants.

In this situation, it appears that Trump is actually upset over allegedly unfair subsidies that the EU granted to Airbus.

Yes, a dispute involving plane manufacture has somehow managed to spill over into the Italian wine industry.

Trump’s aim is to use these tariffs to apply pressure to the EU so that it will stop providing subsidies to Airbus altogether. The Italian wine industry is just going to be collateral damage under the situation gets resolved.

And here’s the worst part…

The US already has tariffs in place.

They’ve already applies a 25% tariff to European wines this year because of Trump’s squabbles with the EU.

Luckily, many Italian winemakers have managed to absorb the costs. As a result, consumers haven’t really seen much of a difference.

That won’t be the case with a 100% tariff. With that, Trump will double the burden and the effects will be felt both by those in the industry and those who indulge in its products.

What Does This Mean for Italian Winemakers?

Simply put, this tariff will make it much more expensive for Italian winemakers to sell their wares in the United States.

Trump’s essentially creating an import tax that’s going to get passed onto the producers. They have to pay a larger entry fee just to get their products into the country.

A lot of producers may not be able to afford the costs. Or, they may just be unwilling to play a game that ultimately has nothing to do with them.

Of course, the tariffs also affect the companies in the United States that work with Italian winemakers. 

Imagine you’re running an import/export business in the states. Italian wines have always been a profitable product for you. But now, your suppliers have to eat a huge cost just to get their products to you.

One of two things is going to happen.

You’re either going to lose a bunch of suppliers, which means you have to put time and money into finding new ones.

Or…you’re going to have to absorb some costs. Your suppliers aren’t going to want to have to just eat the tariffs. They’re going to pass some of those costs along to the people that they’re selling to.

And frankly, there’s very little that either party can do about the situation. After all, Trump’s just using the wine industry to punish the EU for business dealings that he doesn’t like.

What Does This Mean for Consumers?

Well…we can already see that Italian winemakers will want to pass some of their increased costs over to their buyers.

What do you think this means for you when you want to but a bottle of Italian wine?

Of course, those costs are eventually work their way down the track until they land at your door. The Italian wines that you buy will come with a higher price tag than they did last year.

And that’s just the beginning.

For you see, Trump is also considering attached this tariff to several other EU products. Cheese is one that’s being held up as an example. If the tariff goes through, the cost of your favourite French and Italian cheeses will go up.

Suddenly, that fun wine and cheese night you have planned will leave a bigger hole in your pocket.

And finally, we have the biggest blow, particularly where the Italian wine industry is concerned – the loss of variety.

These tariffs will do a lot to discourage smaller and more regional Italian producers from selling their wines in the United States.

That means that you’re left with a more limited selection.

And of course, that directly damages one of the Italian wine industry’s key strengths. After all, it’s the variety that Italy offers that makes it one of the world’s greatest wine-selling nations.

The Final Word

Perhaps this is all just a huge ploy by The Donald to force Americans to drink American wines. Then they’ll have to agree with him that they’re better!

All jokes aside, this situation shows just how deep the effects of unrelated political machinations can go.

The 100% tariff isn’t in place just yet.

But we know that Trump is just the sort of man who would put them in place. And we can’t help but wonder what effect this will have on the industry as a whole.