How does President Trump’s 25 percent tariffs impact the average consumer? We saw it up close Wednesday at the small wine shop where I work part time in retirement.
We’re big fans of Beaujolais wines and sell quite a bit of the gamay-grape wines to our customer base. We’re constantly looking for new and exciting Beaujolais Cru. Yesterday the La Pierre Morgon Cuvee’ arrived for a tasting event.
Most Cru level Beaujolais cost around $20-$25 with the very best maybe hitting $30-$40. This wine can be found online for about $40. But when the wine arrived yesterday the per bottle cost including the tariff, plus our standard markup, drove the price to more than $60.
Frankly, that’s going to be a tough sell. Sure, we sell many wines costing more than $60. But no one expects to pay $60 for Beaujolais.
While not earth-shattering headline news, it’s a real world impact of how a tariff can drive prices in your household.
Maybe you’re not a wine drinker or buy only value wine and see this as much adieu about nothing. But the National Foundation for American Policy (NFAP) estimates the 25 percent tariffs will cost each American household approximately $2000 next year. And recently the President has threatened to increase the tax to 100 percent.
Laurent Drouhin, of the famed Burgundy house, said Tuesday his family is very leary of the tariffs and any increase to 100 percent. Drouhin has exported wines to the US for decades and have not followed popular trends of shifting their sales to China.
“If the 100 percent tariff goes into effect that’s going to big a big thing,” he said. “Maybe we have to pick up the phone.” The reference was to selling wine to China.
So the tariffs aren’t something effecting someone else. Eventually it will effect all of us.
Regardless of politics, the tariffs will impact all of us. Using tariffs to negotiate trade deals is like using a hammer to open a bottle of wine – pretty hard to swallow.