Several Leelanau wine experts are in a holding pattern after blanket tariffs caused global markets to shift over the past week.
“The side where we have exposure is packaging and that has potential for price increases,” Sam Simpson of Good Harbor Vineyard said.
Sampson continued saying cork comes from Portugal and Germany while some glass is sourced domestically and out of Canada and Mexico.
“We try to buy everything domestically but a lot are not readily available and we look to buy first in the United States,” he said.
Sampson hopes that Leelanau wines will be boosted by the tariff s because of the world class wines that the region grows, but with a globalized supply chain that remains a big question.
“As consumers recognize the quality and are more familiar and recognize the treasure in your back yard,” he said.
Lee Lutes of Black Star Farms admits answering anything about tariffs is loaded with a lot of speculation because anything can change at anytime whether in the wine industry or anything else. Lutes says in terms of operational costs the wine industry is very intertwined with global partners.“(Tariffs) have been something on our radar for a while and we are just trying to protect ourselves. And we’ve already made some commitments (shipments) early,” Lutes said. “It’s kind of trying to bet on the stock market. I think its anybody’s guess, “We are trying to cushion things a little bit wherever we can and trying to get aggressive. We are big enough to keep some pricing down ... It’s a precarious situation.”
Lutes didn’t want to speculate on price costs in terms of a glass of wine at the winery because they will be selling wine this summer that was made two to three years ago. But something may come down the road.
“Part of the challenge in this area its expensive here already. You don’t have to drive far north, south, east or west and its amazing how less expensive those day-to-day items are,” he said.
On April 2, Trump announced reciprocal tariffs on every U.S. trading nation that resulted in a roller-coaster global economy over the past week.
European wine has a 20% tax and South Africa has a 30% tariff .
Barrels and corks coming from foreign sources will most likely affect local Leelanau wineries.
For David Albert of Boathouse Vineyard in Lake Leelanau say time will tell.
“I’m pretty much under the radar. But with consumers looking for lesser priced wines, it could turn to additional sales but again I think the larger wineries with wider distribution could see an increase as a result. Time will tell,” Alberts said.
Wine tariffs are attached to European wine-producing countries along with wines from Argentina, Chile, Australia, South Africa, and New Zealand. Back in 2018, President Donald Trump placed another tariff on Europe wine and whiskey. This one seems a lot more serious.
Roughly 30% of wine and spirits by volume are imported, according the Wine and Spirits Wholesalers of America.
Over $6.8 billion of wine was imported into the country with 80% coming from the European Union. An importer must pay the tariff once it reaches American soil.
“President Trump instituted these tariffs to – finally – put American industry first. I believe this represents a huge opportunity for Michigan’s wine producers, cherry growers, and anyone making or growing things in Michigan. For years the cherry industry fought with our own government, at great expense to the industry, to prove that Turkey was dumping cherries into the U.S. market. With tariffs on nearly all imports, including wine and agricultural commodities, consumers will be given a choice; pay more for imports or support American enterprise and choose domestically produced products,' said James Hogge, communication director for congressman Jack Bergman.
