Is Donald Trump about to pull the plug on the U.S. food and wine industry? If his plan for 10% to 20% tariffs on all imported goods goes into effect, wine tariffs are likely to devastate the middle- and upper-ends of the restaurant business, while doing nothing to help U.
S. producers. That’s because finer dining restaurants make their money on the wine and alcohol they sell, not on the food.
Most restaurateurs make 50% to 60% of their profit on wine and drinks, and a 10% or 20% tariff multiplies along the supply chain, often raising prices above what a customer is prepared to pay. “Restaurants are run at ridiculously low margins, like 3% on average, and when one of our better profit-making products is taken off the table, I don’t know where we’ll make it up,” said DeWayne Schaaf, chef and owner of Celebrations, a fine dining restaurant in Cape Girardeau, Missouri. “A lot of people are going to have to pivot: lose wine, lose staff or close days,” he added.
Schaaf and America’s other restaurateurs and wine merchants have experience with the detrimental effect of wine tariffs. When the first Trump administration put tariffs on European wines in 2019, the duties reached 25% and were part of a WTO-sanctioned slap-back for Europe’s subsidies to Airbus airliners. Even Boeing, the U.
S. firm that claimed harm from the tariffs didn’t want wines hit. The Biden Administration rescinded the tariffs in 2021.
“The ultimate goal here is to change behavior,” said Ben A.