The 25% tariffs on wine under the first Trump administration: who bore the burden and lessons for the future
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New York University and American Association of Wine Economists AAWE
On October 22, 2019, the first Trump administration imposed punitive tariffs on bottled still wine from France, Spain, Germany, and the UK. The tariffs were imposed in response to a feud over subsidies paid to Airbus, which put Boeing at a disadvantage, and they were suspended by the Biden administration on March 22, 2021. This paper analyzes the effects of the tariffs, including tax avoidance strategies and tax pass-through rates for wine from each affected country.
Was there a way to avoid the new tariff? For those who could not, who bore the burden—the producer in Europe by lowering export prices or the consumer in the U.S. by paying higher retail prices? Did pass-through rates differ by price bracket? What lessons can be learned for future tariffs on still and sparkling wine?
