Could Tariffs Help California Wine?

In some instances, a little protectionism could go a long way toward leveling the playing field for U.S. producers.

Agriculture is conditioned to think that tariffs are a bad thing, and for some commodities – such as almonds being sold into China and Europe – they can be. But are they bad in all instances?

Speakers and attendees of the Unified Wine and Grape Symposium in Sacramento were abuzz over a recent op-ed by Natalie Collins, President of the California Association of Winegrape Growers, who argues it’s time to “reframe” the “narrative” that reciprocal tariffs would harm the American wine industry.

“The focus thus far has been exclusively on the loudest voices – the American importers and distribution companies, as well as the retailers they serve,” Collins writes. “But let’s be clear: these voices alone do NOT represent the heart or entirety of the ‘American’ wine industry.

Collins contends that tariffs can level the playing field “to give domestic companies a fair shot at competing within their own markets.” Jeff Bitter, President of the Fresno-based Allied Grape Growers, says Collins’ perspective is worth considering.

“You have to be careful with it, but you can at least explore the option,” said Bitter. “We are up against imports and we’re losing that battle.”

Subsidies are giving foreign wines a competitive advantage over American wines in terms of pricing, Bitter and others say. He cited European bottled wines and bulk wine from South America as examples.

“Imports have dropped in the last couple of years, but it’s really come to the surface now that we have grapes hanging on the vine,” Bitter said. “When everyone was growing, it didn’t show up in the numbers, but now it is.”

Collins notes that many American restaurant wine menus “read like foreign trade catalogs,” with a lack of local options limiting consumer choice and undermining the visibility of American wines. She labels as “hypocrisy” that our food chain promotes localism and a “farm-to-fork” narrative while pairing that food with a foreign wine. It even happens in Washington, D.C., where “America first” now dominates the discourse, she writes.

According to Collins, the issue isn’t just with wine. I recently heard on LinkedIn from a marketer who said California avocados are poised to have their best harvest since 2020, and tariffs would likely help them compete with Mexico, which supplies 80% of our avocados.

As of this writing, President Donald Trump has at least postponed tariffs against Mexico and Canada, as the two nations agreed to beef up border security. But a tariff war with China appears to be escalating, and Europe likely is next. While commodity groups seeking greater access to foreign markets may be worried, not every producer is. For some, it’s a time of guarded optimism.

EDITOR’S TAKE:

Like my wife often reminds me, “no matter how flat you make the pancake, there are still two sides!” Well, no matter what you think of tariffs, there are at least two sides to the discussion. This article lays out a pretty compelling argument that for some commodities tariffs may have a positive impact. In the case of wine, they could level the playing field against foreign wines flooding into our country. The fact the U.S. has lower tariffs on foreign wine allows it to enter the country with a competitive advantage.  Higher tariffs could eliminate that advantage and make our domestically produced wines more competitive. How this will play out remains to be seen. For now, the discussion will still have two sides.

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