Regardless of your political views and opinions on Donald Trump, there is one thing we can all agree on: he is doing exactly what he said he would do.
By Michael Kaiser
As I draft this latest column, it is the afternoon of February 11, 2025. Some snow is starting to fall as Washington, D.C., still continues to adjust to its new normal. A new Congress came into power, with Republicans retaining their slim majority in the House and gaining a slim majority in the Senate.
That is not the biggest change in D.C. this winter. Just over three weeks ago. Donald J. Trump was sworn in as the 47th President of the United States. He was also the 45th President of the United States. He is only the second man to win the presidency in two nonconsecutive terms. Only Grover Cleveland had that distinction before this January. Regardless of your political views and opinions on Donald Trump, there is one thing we can all agree on: he is doing exactly what he said he would do.
Last year, I wrote a column outlining what a new Trump Administration could mean with a new Congress. Congress has not done much (so far), but it is only mid-February. It will need to figure out a way to keep the government open past March 14 and is planning on a large bill (or two) to get its tax and other legislative priorities through. But Congress has not really been the story in D.C. this winter; it has been the Trump Administration and everything that comes with that.
Governing by Executive Order
The executive order has been a governing tool for presidents of both parties for many years. When a President wants to get something done but does not see a way through legislatively, they will sign an executive order. Quite often, it will be challenged by the courts on constitutional grounds. President Trump has signed an unprecedented number of executive orders during his first few weeks in office. Several of them have a direct impact on the wine industry.
1. Federal hiring freeze. The Trump administration came to D.C. with a plan to cut the federal workforce. It instituted a federal hiring freeze, meaning no new positions can be filled outside of political appointments. It’s also looking to close entire agencies such as USAID. Will TTB be on the DOGE chopping block?
2. Federal grant freeze. While this executive order was met with mass confusion and is being halted by a federal court, it could prove quite problematic for the wine industry. Many state wine associations apply for Specialty Crop Block Grants through their state departments of agriculture. These grants will often be used to research pest mitigation, or for marketing of a state association. Many states have counted on that money, and now they will be blocked from getting it (if the order ends up standing).
3. “10:1 on regulations.” The Administration has implemented a “10:1” rule for new regulations. That is, for every new rule or regulation a federal agency wants to implement, it needs to cut 10 existing rules or regulations. Hypothetically, if the TTB wanted to approve a new AVA application, they would need to cut 10 existing regulations.
4. Regulatory Freeze. The Administration has also instituted a regulatory freeze, meaning, no new rules or regulations can be implemented until the freeze is over. This would seemingly put the new TTB nutrition and allergen labeling proposals on ice.
New Tariffs Announced
The executive reaction that sent the most shockwaves through the industry was the spectre of damaging tariffs. On February 1, the Trump Administration imposed across-the-board tariffs on goods imported from Canada, Mexico and China. However, the tariffs were put on hold for 30 days after some concessions from Canada and Mexico. The rates were 25% on all goods imported from Canada and Mexico, and 10% on all goods imported from China. Canadian energy exports would be tariffed at 10%. The Chinese tariffs did go through.
The Canadian government issued a swift response. It intended to impose a 25% tariff on all beer, spirits and wine imported into Canada. This was to include bulk wine and is on top of the existing costs to import alcohol into Canada. Additionally, the provinces of Ontario, Quebec, Manitoba, Nova Scotia, Newfoundland, Prince Edward Island, Yukon and the Northwest Territories also intended retaliatory measures to actually remove U.S. wine from retail shelves.
These new tariffs would have a devastating ripple effect on the U.S. wine industry. The largest market for American wine outside of the United States is Canada. While the majority does come from California, states such as Washington, Oregon, New York and Michigan also export their products to Canada. Exporting producers have established markets in Canada. This will impact the rest of the industry as now all of that wine has nowhere to go. The most logical place for it to be sold is right back here in the United States. This will lead to more competition for domestic shelf space and could create a massive wine glut in our markets.
Toasts Not Tariffs
WineAmerica has been adamantly opposed to tariffs and is a member of the Toasts Not Tariffs Coalition, which is a group of trade associations representing producers, retailers and wholesalers in the alcohol sector. Ostensibly, the coalition works on preventing tariffs from the EU and UK, but is also very involved with any potential trade dispute. We have sent a letter to the Trump Administration outlining the danger of these tariffs and will engage with members of Congress to educate them on the economic damage any tariffs will have on our industry. Please visit the Toasts Not Tariffs website to learn more about its efforts.
While our industry has dodged a bullet on these specific tariffs in the short term, there was a 25% tariff levied by the administration on all aluminum and steel imports into the U.S. This clearly will hurt our friends in the beer industry, but many other supplies are made from steel and we will feel the increased prices from that as well.
What is next?
This is just a small sample of what has happened in the last three weeks. We have no idea what might happen next. One thing is certain, WineAmerica will be there to make sure you are informed and your interests are protected.
Michael Kaiser
Michael Kaiser is executive vice president and director of government affairs at WineAmerica, which represents wineries and associations from more than 40 states. For more information about WineAmerica and how to get involved, visit www.wineamerica.org.
