Last month, President Donald Trump threatened to impose 200% tariffs on all wines coming from the European Union. After a tense few weeks, the president changed course last week to levy a 20% tariff on all EU goods, including wine. Though it’s much lower than the high percentage initially proposed, many in the U.S. wine sector are bracing for a financial hit.

That includes Damien Carney, the owner of Avinage wine shop in Petaluma, California. Even though his shop is in Sonoma wine country, imported wines make up 75% of his inventory. So, additional tariffs would upend his business.

“Basically, I would either have to increase prices by whatever the price increase is coming to me from importers,” Carney said, “or try to completely turn around my entire business model.”

He added that even if he did switch gears and stock more U.S. wines, his customers won’t be happy with California Pinot Noir if what they really want is French Burgundy.

“Just simply giving them a wine from Sonoma County or Paso Robles is not going to be the same as the wines that they know and love,” Carney said.

Higher costs are the last thing the wine industry needs right now. A 2025 report from Silicon Valley Bank shows that wine sales are down due to lukewarm interest among younger consumers and competition from drinks like hard seltzer.

Ben Aneff, head of the U.S. Wine Trade Alliance, said tariffs will cause financial hardship for all kinds of U.S. wine businesses.

“The United States imports about $4.5 billion worth of wine from the EU, and U.S. businesses make about $25 billion in revenue from the sale of those products," he said.

The tax will mean less money for anyone selling European wines in the U.S., Aneff said — including restaurants and retailers. “Imported wines are actually one of the very few places you can make a pretty good margin.”

While you might think that U.S. producers would be cheering, even domestic wineries are worried.

John Benedetti, the owner of Sante Arcangeli winery in California, said he’s already paying a high tariff on wine bottles from China and Mexico. Plus, his barrels come from the EU.

“All of my barrels come from France,” he said. “So I have no choice but to pay any kind of tariff that gets slapped on these things.”

That’s one more hit to his business in a down market. Just last month, Benedetti lost a chance to break into the Canadian export market through the LCBO, Ontario’s liquor control board.

“I've been working for seven years to get into the LCBO,” he said, “and it just went 'poof.'”

After the U.S. imposed new tariffs on Canadian products, many provinces banned imports of U.S. wines, and Benedetti’s entry into that new market disappeared.