Canada\u2019s break from American-made wine and the Trump administration\u2019s global tariffs have compounded the struggles of the United States\u2019 already-stressed wine industry to the point that it may be difficult for much of it \u201cto come back from,\u201d an American wine organization leader told NBC News. <\/p>\n\n\n\n
\u201cCanada is the single most important export market for U.S. wines with retail sales in excess of $1.1 billion annually,\u201d Robert Koch, the California Wine Institute\u2019s president and CEO, said in a statement. <\/p>\n\n\n\n
Last month Canada united to boycott<\/a> American wines \u2014 taking all U.S.-made vino and alcohol off its liquor and wine store shelves and out of restaurants across the country \u2014 as an aggressive retaliatory response to Trump\u2019s tariffs<\/a> on its political ally north of the border. <\/p>\n\n\n\n The boycott started in Ontario, and every other province responded in kind. When Manitoba Premier Wab Kinew announced his territory would ban American wine and alcohol, he mocked Trump\u2019s signing an executive order in a social media video<\/a>. <\/p>\n\n\n\n \u201cThis order, it\u2019s a wonderful order, it\u2019s a beautiful order,\u201d Kinew said sarcastically. \u201cThis order is pulling American booze off the liquor market shelves.\u201d His staff, lined up behind him, applauded as he held up the order for all to see. <\/p>\n\n\n\n It has become a point of national pride not to buy American. \u201cTheir people are now motivated\u201d because of the tariffs, Kaiser said. <\/p>\n\n\n\n The results have the potential to be catastrophic for the wine world in the United States. <\/p>\n\n\n\n \u201cWe understand the reasoning behind some of these tariffs,\u201d said Mike Kaiser, the executive vice president and director of government affairs for Wine America<\/a>, a group that advocates for wine industry policies in Washington, D.C. <\/p>\n\n\n\n His industry has been \u201ccaught in the crossfire\u201d of a trade war, and even if the tariffs were reversed tomorrow, he said, \u201cI think the psychological damage with the consumer might be really hard to come back from, even if these disputes are ironed out.\u201d <\/p>\n\n\n\n He added that some exporting winemakers \u201cmay be able to absorb this tariff.\u201d But losing $1 billion a year to \u201cunsold wine that was already in Canada, it really disrupts the domestic wine market here from top to bottom.\u201d <\/p>\n\n\n\n The White House did not respond to a request for comment on the tariffs\u2019 effects on the wine industry. The Liquor Control Board of Ontario, which controls the sale and distribution of alcohol in Canada\u2019s second-largest province, also did not respond. <\/p>\n\n\n\n Before Trump issued tariffs on other countries, America\u2019s wine business had already been facing headwinds. \u201cWe are struggling,\u201d said Christi Coors Ficeli, CEO of Goosecross Cellars<\/a> in the Napa Valley of California. <\/p>\n\n\n\n After the Covid-19 pandemic, wine consumption went down in the United States, sales dipped and visits to wineries became inconsistent. <\/p>\n\n\n\n Alcohol-based drinks like White Claw and High Noon have become popular alternatives to wine, Ficeli said. <\/p>\n\n\n\n In addition, in January, U.S. Surgeon General Vivek Murthy suggested wine could be harmful<\/a>, even in small quantities, which Ficeli believes turned away drinkers. Last, the cost of wine \u2014 to buy it and to visit wineries \u2014 increased because of inflation and, in some cases, wineries\u2019 trying to make up for the slowdown. <\/p>\n\n\n\n \u201cIt has gotten fairly expensive for tourists to come here,\u201d Ficeli said. <\/p>\n\n\n\n Wanda Newman Johnson, a frequent Napa Valley visitor, said the tariffs have put her in a \u201cwait-and-see mode\u201d about whether she will continue to have wine shipped to her home in Atlanta.\u00a0<\/p>\n\n\n\n \u201cI feel really bad, because many of these wineries are small businesses, which are the heart of the country,\u201d said Newman Johnson, who has memberships at Brown Estate and Turnbull Wine Cellars in Napa. \u201cThey\u2019re getting impacted and hurt, and I don\u2019t know how some of them are going to be able to survive the tariffs.\u201d <\/p>\n\n\n\n Ficeli also said Napa has become less affordable to visit in recent years. \u201cA lot of us had to raise prices, because after Covid, pricing was insane, for especially getting glass,\u201d she said. <\/p>\n\n\n\n Most wineries import bottles from China, she said, because U.S.-made bottles are substandard. The price of shipping them out of China also increased by \u201cdouble or triple\u201d the amount pre-Covid. \u201cSo most of us made price increases just to cover our cost increases,\u201d she said. <\/p>\n\n\n\n But with Trump\u2019s 145% tariffs on China<\/a> having initiated a 125% tariff on products made in China coming into the United States, getting bottles from Asia has become cost-prohibitive. Throw in the 10% tariffs on European imports \u2014 under which American wineries buy French oak barrels to cultivate wine and bottle corks from Spain \u2014 and a financial quagmire has emerged. <\/p>\n\n\n\n \u201cSome of the barrel suppliers are telling us that they\u2019ll eat the tariffs and they\u2019ll just give us similar pricing to last year, with a slight increase,\u201d Ficeli said. \u201cAnd some are telling us that it could be a 15, 20% increase in barrel prices, which for a small winery like us is a lot to handle, especially when you\u2019re spending $1,200 a barrel.\u201d <\/p>\n\n\n\n Ficeli said she is concerned about the prospect of having to pass along the increases to her customers, whom \u201cwe don\u2019t want to rip off.\u201d<\/p>\n\n\n\n But the tariffs will affect the cost of bottles, barrels and even corks. \u201cIt\u2019s going to be a struggle,\u201d she said. <\/p>\n\n\n\n And the struggle is not just in California, the largest wine-growing area in the country. In New York\u2019s idyllic Finger Lake region, for example, where there are more than 100 wineries near Canada, the impact of the tariffs is punishing. <\/p>\n\n\n\n