The Tariff Wars Effect On Wine Imports

If you, like us, are looking forward to those exquisite, thirst-quenching rosés from southern France this spring, we just dodged a bullet. A potential increase in the current tariff on European Union wines from 25 percent to 100 percent was postponed in late January by the Trump administration.

The beef between the European Union and the U.S. is based on what the U.S. believes — and the World Trade Organization confirmed — are unfair trade practices involving EU subsidies for the Airbus airplane manufacturer.

In October the U.S. initiated a 25 percent tariff on some European food and wine, including single-malt scotches, olive oil, cheese and wine with less than 14 percent alcohol.  So far consumers have seen only relatively small increases in imported wine prices with everyone in the supply chain taking a slight haircut. However, we have heard rumblings from wholesalers and importers that the feared increase in the tariff would essentially put the brakes on wine imports to the U.S. Potentially the oceans of new vintage rosé and other EU sourced table wines that traditionally arrive in America are on hold subject to the tariff decision.

We spoke to Alan Cohen, owner of VIGNOBLES LVDH USA, a Maryland-based importer and distributor of many EU wines, to get his take on the wine-targeted tariffs. Retailers and distributors would be among the hardest hit by the higher tariffs. Cohen said that if the 100 percent tariffs had taken effect, “it would have shut down all of his business with Europe (EU countries)”.

With EU countries representing 60 percent of Cohen’s business, this is frightening. To put the 100 percent tariff into perspective, that $20 Provencal rosé you enjoyed last spring would now be $40. How many consumers would still be interested at that price? Not many.

Bringing a typical wine container to the U.S. involves a serious financial commitment. In addition to the typical cost of around $50,000 for a container of wine, Cohen pays for shipping and federal taxes. While these charges are due relatively quickly, he can sometimes negotiate terms with his wine suppliers to ease some of the upfront cost until the wine is sold domestically. However, the proposed new tariff would be due within 10 days of arrival in the U.S., adding another $50,000 in cost and an immediate payment.

As of now the imposition of the increased tariff is postponed until late summer, with the existing 25 percent tariff still in place. A small exemption, however, was made to exempt imported prune juice from the existing tariff. What’s that all about?

The Federalist Terlato is a privately owned family importer, marketer and winemaker that owns multiple brands and produces wines from grapes sourced from a wide variety of California appellations. We recently tasted two zinfandels that impressed us with their true varietal expression and overall quality.

The Federalist Zinfandel Lodi 2016 ($18) offered an exciting linear impression in the mouth with bright blackberry and raspberry notes and a lingering fruity finish. The Federalist Bourbon Barrel-Aged Zinfandel Mendocino County 2016 ($22) was finished in American oak barrels and 6 months in charred bourbon barrels. Raspberry flavors dominate with some spice notes that make this a very attractive bold zinfandel. Both of these zinfandels make for great pairing with heavier bold winter fare.

Wine picks

• Enrico Serafino Gavi di Gavi “Grifo del Quartaro” DOCG 2018 ($17). Made entirely of cortese grapes, this dry and expressive Gavi has apple and pear flavors with nice minerality. More complex than most Gavis we have tasted.

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  Tornatore Etna Bianco 2018. This DOC wine from Mt. Etna is very different for those of you seeking a break from chardonnay. Made from carricante grapes, white wine is very aromatic with peach flavors and a hint of orange peel and fresh acidity. The Tornatore family has been growing grapes in this unique and challenging region since 1865.

• Merry Edwards Sauvignon Blanc 2018 ($36). From the Russian River Valley, this aromatic sauvignon blanc reveals peach, apple and mango notes with grapefruit and creamsicle flavors – who doesn’t like creamsicle?
• Famiglia Pasqua Amarone della Valpolicella 2013 ($37). For those of you who like these gentle giants from Italy, this producer is worth seeking out. The wine is full-bodied with classic dried berry and plum flavors with hints of spice and cassis. We liked the vibrant juicy character.
• Allegrini Palazzo Della Torre 2015 ($23). Corvina joins rondinella and a small dose of sangiovese to make an exotic, flavor-packed Veronese blend. Full bodied with ripe black cherry and plum flavors with a dose of spice and garrigue. We loved this wine.

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  Tablas Creek Vineyard Patelin de Tablas Blanc 2018 ($25). We liked the balance in this delicious and fresh blend of grenache blanc, viognier, roussanne, marsanne and clairette blanche. Crisp acidity yet rich and lush fruit character. Tropical and apricot notes with a good dose of spice. For the same price, the red version of this wine is a sturdy Rhone blend of syrah, grenache, mourvedre and counoise.

• Volatus “Bloody Well Right” Tannat 2016 ($34). It takes gut to make wine out of tannat, a monster grape found in the Madiran region of southwest France and even Uruguay. If you like your wines bold, this tannic big boy from Paso Robles will take the hair off your chest. Not surprisingly, it has an alcohol content of more than 16 percent. Beware the mighty dragon!