March 17, 2025 – The issue of tariffs, and their impact on the U.S. wine industry, is extremely nuanced. While a 200% tariff on European wine presents significant challenges for domestic importers and distributors, it also highlights the long-standing struggle of California winegrape growers and producers to compete against foreign competitors benefiting from lower production costs and, in many cases, generous public subsidies.
“A tariff alone won’t create a fair market, real change requires action from policymakers, industry leaders, and consumers alike. If we want to protect California winegrowing, we need policies that stop unfair trade practices and a commitment to buying and promoting California wine,” said Natalie Collins, President, California Association of Winegrape Growers.
“Despite the attention surrounding this latest tariff threat, it is unlikely that tariffs of this magnitude will be implemented in a sustainable or long-term manner. However, this moment presents a valuable opportunity to address the need for a level playing field for California winegrape growers,” Collins continued.
“CAWG supports a balanced approach to strategic trade policy, one that enables our growers to compete while advancing economic, social, and environmental sustainability. We take pride in producing some of the world’s highest-quality wines, despite operating in one of the most expensive and least subsidized regions. Exploring trade or other policy solutions to support California growers and family-run businesses in a sustainable way remains a top priority.”
Amid all the noise over tariffs, an actual, and very real, crisis is unfolding in California Wine Country. Winegrowers and wineries are being forced to make impossible decisions; ripping out vineyards, ending family businesses, and shutting down operations. This economic reality must be addressed if we want to ensure a sustainable future for the U.S. Wine Industry.
While much of the attention has been on the impact of tariffs on bottled imports, bulk wine imports (finished wine shipped in large flexi-tanks, bladders, or containers) pose a more urgent and direct threat to California winegrowers. Foreign bulk wine floods the U.S. at below-market prices, allowing companies to bottle and sell it under familiar “American” brands, misleading consumers and undercutting domestic farmers. In 2024 an estimated 300,000 tons of California wine grapes went unharvested while 38 million gallons of cheap foreign bulk wine replaced California grown grapes.
Adding to the problem, the Federal duty drawback system, in its current form, further incentivizes bulk imports by allowing companies to claim refunds on import duties and excise taxes; giving imported wine a competitive advantage in the US market. This flawed program may render tariffs ineffective if companies can simply recover those costs through duty drawback. The combination of bulk imports and duty drawback have driven down grape prices, left fruit unsold, forced growers to pull out vineyards, and pushed generational farming families out of business.
California’s wine industry is a cornerstone of American agriculture, supporting thousands of jobs and rural economies. CAWG urges policymakers in Sacramento and Washington, D.C., to take a balanced, long-term approach that focuses not just on tariffs, but on creating a fair and competitive market for California winegrowers and wineries.
About the California Association of Winegrape Growers
CAWG is a statewide nonprofit trade association advocating for California’s winegrape growers to ensure the sustainability of the winegrape industry. CAWG promotes the industry’s long-term success by advancing the adoption of sound public policies and fostering awareness and understanding of winegrape growers’ contributions to the economy, environment, and California communities. Learn more at cawg.org.
