{"id":11335,"date":"2020-02-12T18:08:00","date_gmt":"2020-02-12T18:08:00","guid":{"rendered":"https:\/\/divinonyc.com\/blog\/?p=11335"},"modified":"2020-11-29T03:59:24","modified_gmt":"2020-11-29T08:59:24","slug":"trump-tariffs-punish-all-americans-not-just-wine","status":"publish","type":"post","link":"https:\/\/divino.wine\/trump-tariffs-punish-all-americans-not-just-wine\/","title":{"rendered":"Tariffs Punish All Americans. Not Just Wine."},"content":{"rendered":"\n

An Economy of Imports<\/h2>\n\n\n\n

Tariffs are taxes on imported goods. The resale of imported goods, from machine parts to citrus is a bedrock of the American economy. If you are reading this, something (most likely your device) did not originate on American soil. <\/p>\n\n\n\n

Hundreds of thousands of people rely on imported goods whether they’re making nails in mid-Missouri <\/a><\/strong>to making margins during happy hour in a Midtown, Manhattan restaurant with $10 glasses of Bordeaux. <\/p>\n\n\n\n

Tariffs, Subsidies, and Exemptions<\/h2>\n\n\n\n

American consumers are largely unaware of price fluctuations. Importers and distributors have spent decades building a market for their products, and plenty of negotiation happens with suppliers in origin countries. <\/p>\n\n\n\n

Subsidies<\/h3>\n\n\n\n

Some industries receive government subsidies when their livelihoods are threatened by government-imposed tariffs or retaliatory tariffs in other countries, like soybean farmers affected by Trump’s trade war with China<\/strong><\/a>. While subsidies do little to alleviate the pain, in some instances they allow business owners to plan for the coming year. <\/p>\n\n\n\n

The wine and food industries affected by the proposed 100% tariffs<\/a> <\/strong>will NOT receive any subsidies. <\/p>\n\n\n\n

Exemptions<\/h3>\n\n\n\n

Some industries have enough leverage in Washington to appeal for tariff exemptions. The aforementioned mid-Missouri nail factory that saw sales drop by 60% following Trump’s steel tariffs, finally received an exemption after 10 months, which will allow them to return to competitive pricing, and yet the damage was done. <\/a> <\/strong><\/p>\n\n\n\n

Not Just Wine<\/h2>\n\n\n\n

In October 2019 the Trump administration placed a 25% tariff<\/strong> <\/a>on imported wines, whiskey, and other European goods in retaliation for European subsidies to Airbus, a producer of large aircrafts and competitor to American Boing. See the full list<\/strong>. <\/a><\/p>\n\n\n\n

Where and when possible, importers and distributors absorbed the added costs to keep prices, and therefore their customer base, consistent. While you may have read about it, it’s unlikely you noticed a radical price increase in Parmigiano Reggiano or Greek yogurt at your local grocery story. That will change.<\/p>\n\n\n\n

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This Won’t Last Forever Right?<\/h2>\n\n\n\n

Wrong. <\/p>\n\n\n\n

The tariffs might not last, but the effect will be long-term and potentially devastating. The goal of levying tariffs on imported goods (taxing Americans) is to put pressure on foreign governments to facilitate trade and favor American imports abroad. Trade wars are supposed to end in a negotiated response. Ideally importers are able to return to pre-tariff pricing and recuperate losses. If these 100% tariffs (taxes) go into place, entire business models will be affected for years to come. Many will not survice.<\/p>\n\n\n\n

Long-Term Projections are Impossible.<\/h2>\n\n\n\n

At every level, business owners make purchasing and hiring decisions based on projections of what they can afford to import, distribute, buy and sell, months in advance. As this article explains<\/strong><\/a>, every aspect of the wine business is affected when the prices increase. <\/p>\n\n\n\n

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European Winemakers Will Sell to China.<\/h2>\n\n\n\n

The Asian wine market is exploding. Even small producers and exporters are making a footprint in Asia, China specifically.<\/p>\n\n\n\n

This is already happening. The DATA is in and it’s damaging to USA economic growth.<\/h2>\n\n\n\n

Click <\/a> to see the shift of our wine industry revenue lost, and GAINED in Chine. <\/p>\n\n\n\n

A diverse client portfolio makes sense, and American-European wine relationships go back beyond a century. That said, wine producers abroad can no longer afford to allocate wines to the United States when their sales are threatened. Read more<\/a> from a respected American importer’s experience.<\/p>\n\n\n\n

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The Three Tier System<\/h2>\n\n\n\n

Our three-tier system, for wine and spirits distribution requires that all products, domestic and imported to employ a distributor. By the time the wine ends up in your glass, it’s been marked up several times: <\/p>\n\n\n\n