For years, I’ve had no trouble finding distinctive, expressive wines that cost under $20 a bottle. (I share these selections in a seasonal 20 Under $20 article.) But this sweet spot is disappearing.
Though President Donald Trump announced a 90-day pause in enforcing retaliatory tariffs of 20% on all imports from the European Union along with tariffs of up to 30% on imports from other major wine-producing countries, the 10% percent universal tariff he imposed will make it harder to turn up fascinating wines in this price range.
Aside from the damage it will cause to the network of small importers and distributors, retailers and restaurants responsible for getting wine to American consumers, along with the associated shipping and warehousing concerns, the tariffs, especially if the retaliatory penalties are imposed, will limit the options of those consumers who lack ample amounts of disposable wealth.
Is wine going to cost more?
The tariffs will drive up the cost of imported wines. By how much? It depends on who absorbs the tariff penalty. In some cases, each party in the chain from producer to consumer will accept a little pain and nobody will have to pay the full share. But some businesses can’t or won’t accept smaller profits, so in some cases those extra costs may be passed entirely on to the consumer.
Regardless of how the tariff penalty is divvied up, lower-priced wines are going to feel the impact more than expensive wines. Why? Because in general, people who are willing to pay $85 for a bottle of village Burgundy or $200 for a Napa Valley cabernet sauvignon will not care if the Burgundy costs $99 and the Napa cabernet $250. These prices are partly set by demand and are paid by wealthy consumers.
But value-conscious wine drinkers willing to buy an $18 cava may balk at a $23 cava. When these wines become not such good values anymore, demand will decline and they may fall out of circulation. This will diminish the options available to consumers.
But I’ll still find good, affordable wines, right?
For as long as I’ve been making my 20 under $20 recommendations, I’ve argued that the $15 to $25 range offered the best quality-to-price ratio.
Tons of wines are in the market for less than $15 and even $10. But these are often processed wines, made from grapes grown in vast, chemically farmed vineyards in undesirable places, then vinified in factories with additives and technological manipulations.
Many find these wines satisfying enough, though demand for such wines has been falling for several years. That’s fine, though I’d rather drink beer or water than wines like that. Have I ever found a decent wine at these low prices? Sure, but rarely. The odds are against it.
These are the wines that, because of the tariffs, will now be in that $15 to $20 range.
How do tariffs affect American producers?
Isn’t one goal of the tariffs to support American businesses? The United States makes many wonderful wines, from the West Coast to the East Coast, Texas to Michigan. The cost of these wines is likely to rise as well. First, American winemakers rely on imported goods, whether barrels, bottles, corks or winemaking equipment. These costs will rise.
Second, almost all American wines reach the marketplace through distributors who work with imported wines as well. They may spread out the cost of the tariffs through their entire portfolio so that the imported segment does not have to rise as steeply.
But won’t tariffs level the playing field?
For many reasons, including the cost of labor and land, and the fact that European governments tend to invest in wine businesses while the American government does not, it’s difficult for American wines to compete with European wines of equivalent quality, especially at lower prices. The fixed costs of making wine in the United States are higher.
Tariffs may make it easier for American wines to compete, but there’s another, bigger problem.
Good wines are distinctive. They speak of the place the grapes were grown and the people who made the wine. You cannot simply substitute, say, a Sonoma chardonnay for a chardonnay wine made in Chablis or in Meursault. A riesling made in Washington state will never have the character of one from the Mosel Valley of Germany.
How will wine selection be impacted?
Historic wine-producing countries often make wines of hundreds of different grapes, a legacy of centuries past when most wine was grown and consumed locally. Each valley had its own grapes and its own style, many of which have been revived over the past few decades to the delight of wine lovers.
The modern American wine industry did not evolve in this fashion. Its pioneers were entrepreneurs who sought to plant the grapes that they deemed the best in the world, primarily cabernet sauvignon and chardonnay. Their success with these grapes and a handful of others, like merlot, pinot noir, sauvignon blanc and zinfandel, led to hordes of imitators who planted the same set of grapes.
For years, people believed that eight varieties accounted for more than 90% of California wines. I don’t think the percentage is quite that high anymore, but you get the idea.
The variety of wines made in the United States is dwarfed by the vast assortment available from other countries. If you’ve enjoyed wines made with grapes like carricante, limniona, fer, saperavi, treixadura, aglianico or touriga nacional, you are unlikely to find American-made counterparts. The tariffs may diminish some of that glorious variety.
It’s true that American producers in the past 20 years have slowly been diversifying the wines they make. The driving forces for this has been American producers who have been inspired by European wines they’ve discovered. If access to these wines is reduced you are less likely to see the continued exploration in the United States of grapes like trousseau and assyrtiko.
One crucial reason for this wide variety of imported wines is that, unlike any other beverage businesses, wine comprises hundreds of small producers around the globe. These farmers and winemakers have often resisted efforts by bigger businesses to absorb their holdings, or entreaties by marketing agencies to simplify their output or conform to popular styles.
They are able to stay in business because of the demand for what they offer. A significant percentage of their business is often in the United States. Trump’s tariffs will make it more difficult for many of these small businesses to survive, just as they will squeeze many of the small American businesses that import and distribute these wines. We may see more consolidation in the wine growing and distribution businesses, which will further diminish diversity.
Ultimately, it’s irrelevant whether I can pull together enough bottles to write the 20 Under $20 articles going forward. The point is that these wines will no longer be available to anybody unless they are willing and able to spend more money per bottle.
The price of wine will never be a political talking point, like the price of eggs has been. Good wine is not a necessity, but it enhances life. For many, wine may no longer make the cut in their tariff-tightened household budgets.
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