Episode summary
Why European Wine Could Get Pricier Under New US Tariffs
Wall Street Week
· · Guests: Victor Schwartz, Ben Aneff, Stuart Spencer
Summary
President Trump’s renewed threat of a 200% tariff on French wine and champagne set off concern across the U.S. wine trade, from importers to restaurants to distributors. Victor Schwartz argued that even a 10% or 20% tariff would hit a business with only 5% to 10% net margins, raise shelf prices sharply, and reduce choice because many European wines have no direct domestic substitute.
The broader industry case was that tariffs would not just hit imports; they would also damage the domestic wine ecosystem. Ben Aneff said distributors and importers rely heavily on imported wine, and domestic wine producers depend on those same channels to reach restaurants and wine shops. He argued that a trade deficit in wine misses the larger picture, because American businesses earn far more from selling imported European wine than the United States spends bringing it in.
Stuart Spencer offered the counterargument from California grape growers, saying European wine is heavily subsidized and that bulk imports undercut local producers. But he also said tariffs would not solve structural problems in the value-wine segment. The discussion ended on the uncertainty itself: even before any tariff takes effect, businesses are already delaying shipments, cutting options, and preparing for contraction.
Key takeaways
- Victor Schwartz said a 20% tariff could turn a $20 bottle into about $25, which would be hard to absorb in an industry with 5% to 10% net margins.
- Ben Aneff said about 75% of distributors’ revenue comes from imported wine, so tariffs would hurt sales of both imported and domestic bottles.
- Stuart Spencer said California growers face unfair competition from subsidized European wine and bulk imports that undercut local prices.
- Aneff argued the U.S. makes almost $23 billion from selling European wines here, far more than the $5.3 billion it imports from the EU.
- Schwartz said the immediate effect of tariffs and uncertainty would be fewer choices for consumers and possible closures for small businesses.
Notable quotes
“we can't afford 10%. We can't afford 20%. But 20% is really egregious”
“-Distributors and importers, even those, by the way, that represent U.S. domestic wines, about 75 % of their revenue comes from imported wine”
“The demand for those products is collapsing. People aren't buying bulk wine the way they used to”
“Contraction means American businesses closing and firing all their employees”
How the episode opens
President Trump put prohibitive tariffs on European wine back on the agenda this week when he lashed out at President Macron for refusing to pony up $1 billion to join the Council for Peace he's putting together to rebuild Gaza. -Well, nobody wants him because he's going to be out of office very soon. So, you know, that's all right.
What I'll do is, if they feel like hostile, I'll put a 200% tariff on his wines and champagnes, and he'll join. Westin: Stocks reacted dramatically, with shares of Paris-based luxury goods maker LVMH tumbling after the comments. If it all sounds a bit familiar, that's because it is.
Last March, President Trump threatened similar tariffs, prompting our story about the business of wine and what tariffs could mean for the people who make and sell it. People like Victor Schwartz. -It's been a mess.
Westin: In New York, importer Victor Schwartz has spent nearly 40 years supplying restaurants and wine shops with hand-picked bottles from small European vineyards. Now, tariffs threaten to upend the business. -It was 20%, then it was 10%, then they threatened 50%.
Westin: How different is the effect on your business of a 20 versus a 10? -I mean, in our industry, end of the day, we might make 5% as a net profit, 5% to 10%. So, obviously, we can't afford 10%.
We can't afford 20%. But 20% is really egregious. 20%, I mean, think about what that does.
God, you know, it makes a $20 wine, you know, $25 basically, because, you know, there's kind of a multiplier effect as it goes through the system. You know, it's a much bigger impact. And don't forget, when we raise a price, it's not as if the consumer just accepts it.
Westin: Where do American customers for wine go if they decide, "The price is too high, I'm not going to buy that"?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us tariffs
- european wine prices
- french wine imports
- restaurant and distributor impacts
- trade war effects
Companies and tickers mentioned
- US Wine Trade Alliance
Watch the episode
Watch “Why European Wine Could Get Pricier Under New US Tariffs” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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