Wine tariffs currently affect the majority of European wines imported to the U.S.
On October 18, 2019, the U.S. imposed a 25-percent tariff on a variety of goods, including wine, imported from the UK as well as three countries of the EU. These countries were found guilty of providing illegal government subsidies to the multinational aerospace company Airbus by the World Trade Organization (WTO). By subsidizing Airbus, the three countries where the corporation’s shares are traded—France, Spain, and Germany—distorted the marketplace for airliner manufacturing in general and the Boeing Company in particular.
The 25-percent tariffs placed on many European wines will last at least through the end of 2020, but the good news is that the 100-percent tariffs that were once threatened are very unlikely to come to pass. What do tariffs mean for wine collectors now and in the near future? We’ll discuss how tariffs are affecting collectors and suggest some ways to continue to secure fine wine at good rates.
What Wine Tariffs Mean for Collectors
The short answer to what wine tariffs mean for collectors, as well as investors, is that certain wines originating from France, Spain, Germany, and the UK may cost more to buy if they were (or will be) imported into the U.S. after October 18, 2019. Wines affected by these tariffs are still wines, wines in bottles that are smaller than two liters, and wine with an alcohol by volume (ABV) of 14 percent or less.
The Office of the United States Trade Representative (USTR) will be conducting another review of the tariffs soon and will be accepting public comments starting June 26. Concerned customers can contact the Office of the United States Trade Representative to push for the removal of tariffs.
How to Reduce the Impact of Tariffs on Your Collection
Thoughtful research and investment can help mitigate the impact tariffs have on your portfolio. The following steps are good ways continue to build your collection while avoiding the biggest effects of the tariffs:
- Purchase wines from France, Spain, Germany, and the UK that are exempt from tariffs as well as wines from countries that aren’t subject to duties at all. This includes sparkling wine like Champagne, large-format bottles, and higher ABV wines, as well as Italian wines and New-World wines like those from the U.S., South America, and Australia.
- Sign up for retailers’ email lists to get up-to-date offers and information. Some of Vinfolio’s offers absorb the cost of tariffs for the customer. Vinfolio also sells many wines currently exempt from the tariffs.
- Continue building your wine collection with what’s in stock on the marketplace now. Wines that arrived in the U.S. before October 2019 are tariff-free. It’s a great time to buy 2009 and 2010 Bordeaux wines in particular, and these were excellent vintages for many estates. Bottles of Burgundy and Rhône from 2017 or earlier make standout additions to a portfolio right now, too.
- Choose a wine retailer that can hold your purchases overseas for now. Vinfolio has partnered with a storage facility in the UK, Vine International, and arranged free professional storage for all fine wines subject to the EU tariffs through October, at which point there should be greater clarity about the actual duration of the Airbus tariffs.
- Finally, consider selling wines from your collection to other investors and enthusiasts who are also feeling the pinch brought on by the tariffs. Taking the time to rebalance your portfolio is never a bad idea. And, with more buyers looking for wines that are tariff-free and readily available, you have a unique opportunity to fill a need and, possibly, free up some funds to expand your collection in a different direction.
It’s Still Possible to Secure Fine Wine at a Reasonable Price
Though the addition of a 25-percent tariff on so many wines imported from the EU may seem unfair, it’s still possible to purchase top vintages from around the world and even to find some excellent prices. For example, 2019 en primeur Bordeaux is equally high in quality as 2018 Bordeaux, but, due to the tariffs and the impact of coronavirus, en primeur 2019 wines are priced an average of 30 percent less than 2018 wines. Moreover, 2019 Bordeaux won’t ship for another couple of years, at which time the tariffs will most likely be lifted.
Buying fine wine right now is easier when you have Vinfolio’s marketplace, partnerships, and storage facility abroad to get you through. We’ve also got plenty of in-stock stateside vintages that are tariff-free, and our staff is on hand to answer any additional questions about what the wine tariffs mean for collectors and investors.
Whether you are starting your high-end wine collection or adding to an established portfolio, Vinfolio is your partner in buying, selling, and professional storage. Contact us today to get access to the world’s finest wine.
