How tariffs have affected wine sales

An analysis in Barron's and carried in Penta described how US tariffs on EU goods have affected wine sales in the US. Last October, the U.S. government began imposing 25% tariffs on still wine from several European countries in retaliation for European subsidy of Airbus. Those tariffs were supposed to expire now, but the US government has decided to let them continue. 

Tariffs on alcoholic beverages are causing harm to U.S. small businesses and the hospitality industry. The 25% tariffs mean that for every US$1 in harm dealt to EU businesses an estimated US$4.52 is dealt in damage to U.S. businesses. This is hard to absorb on top of the Covid-19 pandemic fallout. 

The US has a prohibition-era law that requires only US-owned businesses to deliver wine to consumers in a three-tier system. The U.S. distribution system requires wine producers (which can include importers) to sell to wholesalers, which then sell to retailers, which sell to consumers, meaning margins for most of these businesses are relatively modest. 

Allowing the tariffs to continue has sent a message to all these small businesses. I hope they take that message to the polls in November.