Canada’s largest export market for US wine has imposed 25% tariffs on US goods, including alcohol. The two provinces of Ontario and Quebec will stop selling US-alcohol products starting Tuesday, a move that could devastate the struggling California wine industry.
The tariffs are retaliation for President Donald Trump’s 25% tariffs on Canadian imports. However, the levies on Canada and Mexico were paused for a month before going into effect.
US wineries are already reeling from a decline in consumption and oversupply of wine. The 25% tariffs will dramatically increase the price of California wines for Canadian buyers, making them more expensive due to exchange rates, taxes, and duties.
Kenny Likitprakong, founder of Hobo Wine Company, estimates that 10% of his annual production is sold to Canada, with most sales coming from Ontario and Quebec. The tariffs will hit him hard, particularly since he has hundreds of cases of wine labeled for Canada already in his warehouse.
“It’s a pretty painful hit,” Likitprakong said. “It’s like getting kicked when you’re already down.” He fears that the impact will be long-lasting, even if the tariffs are canceled after the 30-day period.
The Wine Institute estimates that US wines account for $1.1 billion in annual retail sales in Canada, making it a crucial market for many wineries. However, with this new trade dispute, California wineries may lose significant revenue and face increased competition from European wine producers.
Source: https://www.sfchronicle.com/food/wine/article/canada-wine-trump-tariffs-20136990.php