Trump's Proposed 200% Tariffs on European Wine Could Be Disastrous for Restaurants

Yahoo

21-03-2025

On Wednesday, Bobby Stuckey got a message that was jarring and succinct. The acclaimed restaurateur and Master Sommelier had an email from the U.S. Wine Trade Alliance with a subject that read: HALT ALL E.U. WINE SHIPMENTS. The organization was telling its members that the risk of President Trump imposing 200 percent tariffs on alcohol from Europe was too high right now for business to operate as usual. Importing wine from overseas this close to the proposed April 2 implementation date could hit with a levy so punitive that they'd be stuck with inventory they couldn't sell. It was an ominous sign for businesses, such as Stuckey's, where European wine is a major revenue driver. If the tariffs went through, it could upend many a restaurant.
'They're taking away a right of mine to run a business the way I want to be able to run the business,' Stuckey says. 'President Trump and his advisors are making a lot of stress for business owners. That's not meant to be political, that's just a fact.'
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Trump first threatened the 200 percent tariff on all wine and spirits from the E.U. a week ago, when Europe declared it would enact a 50 percent levy on American whiskey starting April 1 (the E.U. announced Thursday it would push that back to mid-April, thus delaying America's potential response), which was a retaliation against Trump tariffs on imports of steel and aluminum.
Regardless of its origins, this international trade standoff has left American restaurants in the crosshairs. In this industry where profit margins are so slim, wine helps keep many places solvent. 'This is a stat from before the pandemic, but the average profitability of an American restaurant is around 6 percent,' Stuckey says. 'It's not uncommon for restaurants in our company to have 30, 35, maybe even 40 percent of its top-line revenue come from spirits and wine.'
Like with Stuckey's hospitality company, at many restaurants around the country, wine—especially selections from abroad—is intrinsic to the experience. 'Bad Idea serves Lao-inspired cuisine and primarily European wine, and those are two elements that set us apart from the restaurant scene in Nashville,' says Bad Idea's owner and wine director Alex Burch. 'Thirty to 40 percent of our ingredients and a much higher percentage of our wine come from outside of the United States. These potential tariffs are horrendous.'
For Chase Sinzer, co-owner of the hit restaurants Claud and Penny on New York's Lower East Side, echoes Burch's sentiments. 'It would impact us greatly because revenue wise, our business is based on wine sales,' Sinzer says. 'We've been lucky enough to amass a network of people who trust us in the wine department, and that's what enables us to be in business.' Sinzer's bistro Claud has amassed a comprehensive wine list with nearly 2,000 selections, and his newer spot—the seafood bar Penny that's directly upstairs from Claud—offers a similarly large list with upwards of 2,000 wines.
'We're buying wine in very complex ways, from a variety of sources—private collections, wholesale distributors, auction houses—we run the gamut of everything available to us because we're looking to offer the best of the guests and tariffs effect every single part of that ecosystem,' Sinzer says. 'What is so integral to these restaurants is a big wine list, and it will be damaged by tariffs because it will damage every part of how we buy wine.'
When first floating the 200 percent tariff, Trump argued it would be a boon for American wine, as drinkers would turn to stateside producers instead of European vintners. But at restaurants like Stuckey's Tavernetta in Denver, only Italian wine and Champagne is served, so just stocking American wine doesn't really fit with the ethos of the place. And besides that, Sinzer doubts that people who prefer wine from abroad will just adjust their preferences accordingly. 'When you want orange juice in the morning, and someone runs out of orange juice because it's more expensive, you don't just consume the same amount of apple juice,' Sinzer says. 'There is no pivot for guests who enjoy wine from Burgundy, the Rhône, or Champagne to switch to domestic sparkling wine or California Cabernet. The idea this is going to incentivize domestic production is a falsehood.'
Great wine is finite. The best bottles that arrive on American shores are the result of importers, sommeliers, wine shop owners, and restaurateurs building relationships with winemakers abroad in order to receive an allocation of a winemaker's yield. With a 200 percent markup on bottles, it would be incredibly difficult to sell those wines in America, so those European vintners will just build relationships with other markets. So even if the tariff turns out to only be temporary, there's no guarantee wine producers will begin shipping to America again.
'Our country will be the biggest loser from this,' Burch says. 'Don't get me wrong, America produces some amazing, world-class wine, but part of the joy of wine is that you can't just recreate the place or history of other regions around the world. The U.S. produces roughly 10 percent of the world's wine. Do we really want to turn the lights off on 90 percent of what the world has to offer?'
Many restaurateurs have told us that they are taking a 'wait and see' approach with these tariffs, hoping its merely saber rattling. Sinzer has been proactive just in case the worst happens. 'We've been buying wine at an increased clip since election day because of the threat of tariffs; we've been filling every nook and cranny we have with wine coming to the States pre-tariff,' he says. 'The people this will hurt most are the ones without the liquidity or storage space to stock up.' But even with the buffer, extended time with a 200 percent wine tariff would be detrimental to Sinzer's businesses and restaurants across America. And worries abound about the potential economic impact.
'Restaurants are the biggest private sector job creator in our country—12 times the size of the airline industry,' Stuckey says. 'Our industry is already so fragile and all of a sudden you add something else that could kill a lot of restaurants? It's just bad math. You're not hurting the Europeans. You're hurting taxpayers and small businesses in United States.'
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