A new presidential administration will take office on January 20, 2025, and one of the proposed policy changes is the addition of tariffs on imported goods, including wine and spirits. These proposed tariffs could drastically affect the U.S. beverage alcohol industry and its broader economic landscape.
Wine & Spirits Wholesalers of America (WSWA) recently held a webinar, "Navigating Trade Challenges," to address the potential economic and market implications of proposed tariffs on imported wine and spirits with the following panelists:
- Dina Opici, President, Opici Family Distributing & WSWA Chairwoman
- Theo Koebel, Executive Vice President of Portfolio Management, Winebow
- Michael Correra, Executive Director, Metropolitan Package Store Association
- Dawson Hobbs, Executive Vice President, Government Affairs, WSWA
What are Tariffs?
A tariff is a tax imposed by the government on the import or export of goods. In this case, the tax is being proposed on goods entering, or being imported, into the United States. This tax can be enacted as a way to generate revenue, to promote domestic industry and production over importing, or to "punish" a country for unfair trade policies.
In incoming President Donald Trump's case, his proposed tariffs are aimed at protecting and strengthening American industries, securing domestic jobs, and promoting economic independence. The incoming president has proposed 25% tariffs on all imports from Mexico and Canada and a 10% tariff on imports from China.
What's at Risk With the Proposed Tariffs?
According to WSWA's SipSource data, imports account for 30–35% of the U.S. beverage alcohol market, representing products like tequila, Scotch, and Champagne. At a time when the combined wine and spirits marketplace has already seen a -5.2% volume decline, tariffs could have devastating effects.
These effects could include threatening up to 500,000 American jobs and resulting in $25 billion in lost tax revenue, according to WSWA economic analysis.
When tariffs are imposed on imported products, the result is often a switch to and rise in profits for domestic alternatives. However, imported, single-origin wine and spirits, like Scotch Whisky, Champagne, and tequila, have no domestic alternatives due to their unique production requirements and geographical origins.
“While these tariffs are designed to protect American industries and jobs, the unique nature of the wine and spirits sector means their unintended consequences could achieve the opposite," said WSWA Chairwoman Dina Opici. "Tariffs on imported wine and spirits directly threaten thousands of jobs within the U.S. distribution, retail, and hospitality industries, which rely heavily on these products."
During the WSWA webinar, the panelists shared newly released data from economic consultant John Dunham and Associates, which underscores the impact of blanket tariffs at 10-30% on all imported wine and spirits:
| 10% Tariff | 20% Tariff | 30% Tariff | |
| Jobs Lost | 12,000 | 60,000 | 91,000 |
| Wages Lost | $644 million | $3.2 billion | $4.9 billion |
| Tax Revenue Lost | $116.6 million | $2.9 billion | $4.6 billion |
| Economic Output Lost | $1.9 billion | $9.9 billion | $14.9 billion |
John Dunham and Associates also took a focused look at the impact of the proposed 25% tariff on Mexican goods imported into the U.S. market. This would especially affect tequila, one of the only drivers of growth in the U.S. spirits marketplace. Tequila makes up 13% of all spirits sold by volume in the United States, according to WSWA’s SipSource data (October 2024).
| 25% Tariff on Mexican Wine & Spirits | |
| Jobs Lost | 14,000 |
| Wages Lost | $774 million |
| Tax Revenue Lost | $1.3 billion |
| Economic Output Lost | $2.5 billion |
While it's clear the proposed tariffs would affect suppliers, the on- and off-premise industries would not be spared. For example, the higher costs of certain wine and spirits would mean restaurants would have to pass along the added costs to its customers. This could be a crushing blow in the face of prices that have already been rising due to inflation. In fact, according to November 2024 Consumer Price Index (CPI) data, the overall CPI rose +2.7% over the past 12 months, while food-related CPI—including beverage alcohol—increased +2.4%.
"While we understand tariffs are used as leverage in international negotiations, in the wine and spirits industry, the brunt of these policies is felt by U.S.-based importers, wholesalers, and retailers who face higher costs that must be passed down the line," said WSWA Executive Vice President, Government Affairs Dawson Hobbs. "This has ripple effects across the hospitality sector, where restaurants depend on alcohol sales to stay afloat. If policymakers aim to influence foreign trade practices, they must adopt strategies that directly impact those foreign economies without harming American workers, businesses, and consumers in the process."
What Can Be Done About the Proposed Tariffs?
WSWA is working with coalition partners across the wine and spirits supply chain to oppose these tariffs. The association underscores the importance of fostering a globally interconnected industry and preserving the mutual recognition of foreign-origin and U.S. wine and spirits products. "I urge policymakers to reconsider and recognize the far-reaching impact these tariffs have on American businesses and workers across the supply chain," said Opici.
Executive Vice President of Portfolio Management at Winebow Theo Koebel agreed, “Tariffs not only jeopardize access to the marketplace, but also strain relationships across the supply chain. It is critical for all industry players—domestic and international—to unite, collaborate with partners, and advocate for solutions that support growth, diversification, and resilience."
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