Tariffs and the Future of Wine in America

When wine lovers think about what’s in their glass, they tend to focus on varietals, vintages, and vineyards—not global trade policy. But for those of us in the wine trade, the return of tariffs on European wines has us watching container ships and customs rates with the same intensity others reserve for harvest forecasts.

In a recent episode of After Wine School, Keith Wallace and Alana Zerbe, founders of the Wine School of Philadelphia, broke down the looming impact of new tariffs on imported wine. Drawing on their firsthand experience navigating the last tariff cycle in 2016, they offered a candid and sobering look at what’s ahead, and what it means not just for businesses like theirs, but for wine drinkers everywhere.

A Fragile System—By Design

One of the major themes of the conversation is the unique fragility of the wine trade in the U.S., especially for smaller businesses. “We’re not one country when it comes to alcohol,” Wallace notes. “We’re 50 countries with 50 different sets of laws.” Every state maintains its own regulations around distribution, licensing, and sales, a legacy of Prohibition that still defines the industry.

That fragmentation has some benefits. It keeps the scale small. It allows room for mom-and-pop importers, local retailers, and direct-to-consumer wine educators to build meaningful businesses without going head-to-head with national behemoths. As Alana puts it, “Things are on a human scale. That’s the beauty—and the curse—of it.”

But that smallness also makes the system brittle. When one distributor folds, dozens of wines may disappear from the shelves of an entire state. “Even if you only drink California wine,” Keith says, “your local shop relies on French, Spanish, and German wine to stay in business.” If those imports dry up, the ecosystem breaks down—and domestic wines become harder to find and more expensive too.

Agricultural Time vs. Political Whiplash

Wine doesn’t operate on a quarterly earnings schedule. It’s slow. Vineyards take decades to mature. Styles and consumer preferences evolve over years, not weeks. “Wine moves on agricultural time,” Alana explains. “But tariffs hit on political time—fast, erratic, and hard.”

That disconnect creates massive risk. Importers buy wine months in advance, often committing cash long before the product ever arrives at a U.S. port. If a tariff is enacted while wine is in transit, there’s no option to renegotiate. The importer must pay the duty immediately, often with no warning. And unlike larger sectors that can hedge currency or shift production, wine offers few escape hatches.

Back in 2016, when the last round of wine tariffs hit under the Trump administration, Keith and Alana had to move quickly. The school began slowly raising class prices to absorb the 20% increase in wine costs. “We bought up as much as we could before the price hikes filtered into the retail system,” Keith recalls. “That gave us about a year of breathing room.” Still, it was a scramble—one they didn’t want to repeat.

So when signs began pointing to new tariffs in 2024 and 2025, they planned ahead. Both their personal and school wine cellars are now packed to the rafters. “We’ve got wine under the ping pong table,” Keith says. “It’s everywhere.”

Why This Round Feels Worse

The 2025 tariff threat lands at an especially vulnerable moment. Wine consumption in the U.S. is in decline. Younger generations are drinking less alcohol—or skipping wine altogether. Climate change is disrupting production. And a subtle but growing neo-Prohibitionist mood is shaping public health policy and consumer behavior.

“There’s an existential question hanging over the wine industry right now,” Alana says. “And tariffs only accelerate the pressure.”

To compound matters, many businesses haven’t recovered from the last round. The importers and distributors who made it through 2016 and COVID may not have the reserves to weather another blow. And for new players, the barriers to entry are climbing.

At the same time, retail prices are already high. Wines that cost $15 a decade ago now sell for $20 or more. With another layer of tariffs, that $20 bottle could soon be $30. “There’s no upside for the consumer here,” Keith says. “If prices don’t rise, it just means those wines disappear.”

But There’s Opportunity—If You’re Nimble

Despite the gloom, the conversation ends with cautious optimism. Tariffs disrupt the status quo—but disruption can create openings for the bold and the smart.

“If you’re a small business, this is the moment to act,” Keith argues. “Established companies are burdened with contracts, fixed costs, and backlogs. But if you’re new, you’re lean. You can build new partnerships, move fast, and fill the void.”

For instance, if an importer goes under, European producers lose their U.S. pipeline. That opens the door for a new importer to step in, negotiate fresh terms, and carve out a niche. It’s not risk-free—warehousing costs are high, and political unpredictability looms—but it’s a path to entry in a field that’s often hard to crack.

It could also be a boon to domestic wine producers, especially those on the East Coast or in emerging regions. With European wines becoming more expensive, local alternatives gain ground. “This might be the best opportunity Finger Lakes Riesling has ever seen,” Alana says. “All of a sudden, it’s price-competitive with German Riesling.”

For Keith, who’s been eyeing a cooperative winery project in Pennsylvania, the timing might be just right. “If you’re working direct-to-consumer and not reliant on distribution, this is a window to build something special.”

Planning Ahead: Lessons from the Trade

So what can wine lovers—and aspiring wine professionals—do in the face of all this?

First, be aware. If your favorite bottles are suddenly harder to find or more expensive, there’s a good reason. And it’s not just about greed or inflation—it’s about global politics reshaping supply chains.

Second, stay flexible. This might be the perfect time to explore domestic producers, discover new regions, or finally dive into that case of Finger Lakes Riesling.

Third, if you’re in the trade—or want to be—stay nimble and look for openings. The pain in the market today may be the foundation of the next generation of great wine companies.

And lastly? Don’t lose heart. As Keith puts it: “We drink for a living. Not everybody gets to do that.” Even when things get tough, wine remains a shared joy, a slow craft, and a reminder to look for beauty—even when it’s taxed.