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In theory, President Trump's new tariffs would help the American wine industry by making wines from abroad more expensive. But smaller American winemakers aren't feeling so bubbly. Willa Rubin from NPR's Planet Money has the story.
WILLA RUBIN, BYLINE: Wine has a lot of competition these days - beer, cider, seltzer, THC, not drinking. Wine consumption is down, if there's a recession, could go down even more. But Cole Thomas, the founder of Madson Wines in Santa Cruz, California, he is all in. When I called him up and asked if he could put his recorder on top of a book...
COLE THOMAS: I have a European winemaking book right here that's all in French (laughter).
RUBIN: So very appropriate.
THOMAS: I know, right?
RUBIN: For Thomas, it all started 10 years ago. He was 24. First it was a side hustle, then he started his own business. He makes about 40,000 bottles a year.
THOMAS: The scale is microscopic in the scheme of California wine.
RUBIN: His margins are small, too.
THOMAS: Making wine is quite expensive. There's so many things that go into it.
RUBIN: And though his vineyards are in the U.S., Thomas has to buy a lot from other countries.
THOMAS: Bottles, corks, barrels, that's about 30% of our cost of goods. You know, it's many thousands of dollars (laughter).
RUBIN: So when it comes to tariffs...
THOMAS: Are we going to be able to continue to get the products that we need?
RUBIN: About 80% of the world's supply of cork comes from Portugal and Spain. There's a 10% tariff, which could go up after Trump's 90-day pause on higher tariffs worldwide ends. Thomas could pivot, use screw caps instead, but he's worried his customers might be skeptical.
THOMAS: They see screw cap as a cheaper product.
RUBIN: Also, they're often made of aluminum - also potentially subject to Trump's tariffs. Then there are the barrels. Barrels age wine, refine its flavors. Thomas has wine aging in 180 barrels right now, and the barrels come from France. Winemakers love French oak barrels because of the flavor they add. It's smoother, aromatic. Pre-tariff, they could cost like $1,000 a pop, now 10% more, and that could double in July. There are American oak barrels. Mostly, they're used for bourbon. But switching to those would be a swerve.
THOMAS: I believe that the flavor of our wine would completely change.
RUBIN: Finally, there are the bottles. Thomas gets his from Mexico, and lots of other winemakers get theirs from China, where there's a 145% tariff right now.
THOMAS: We would have to charge more for our wine.
RUBIN: Tariffs could also hurt Thomas' wine sales. He sends 70% of his bottles to wholesalers, who get them into restaurants and wine stores around the country. But for the wholesalers, their businesses often depend on importing wine from other countries. So if their businesses are hurt by tariffs, Thomas worries maybe his will be, too.
THOMAS: They're a huge part of our business. I know them personally. I've celebrated birthdays with them. And if their business gets cut because it's no longer cost effective to import their entire European side of their portfolio, I don't know what happens with them.
RUBIN: Thomas says the accounting is both challenging and mind-numbing.
Willa Rubin, NPR News.
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