Let’s revisit some of the topics we discussed in February and see where we are.
By Michael Kaiser
Five months ago, WineAmerica wrote about what the new Trump Administration and new Congress might mean for the American wine industry. I went back and read the opening to the column and remembered snow was falling then. Today, as I write this follow up, it is 89°F, but feels like 96°F — and we seem to get a thunderstorm every day. It’s seersucker weather here in D.C. A lot has happened in the last five months. Let’s revisit some of the topics we discussed in February and see where we are.
Executive Orders and Actual Legislation Passed
At the top of our list was how the new administration was largely governing by executive order. This has slowed down as the year progressed and there has been some legislative work done in the last few months. The two biggest pieces of legislation that have been passed.
Government Shutdown Averted…for now. In mid-March, the House and Senate passed a long term continuing resolution (CR) to keep the federal government open through the end of the fiscal year (September 30). This ends the work on last year’s appropriations process. Once again, Congress was unable to pass the 12 individual appropriations bills as intended.
When the last CR was passed in December 2024, the March 14 deadline was to allow for the time to pass the 12 appropriations bills with input from the new Trump Administration. Predictably, this did not happen and Congress just passed this bill to begin work on the appropriations bills for the next fiscal year. They probably won’t be able to complete those by September 30, meaning we will once again need a CR that will (more than likely) carry us through sometime in December.
The CR was far from clean, however, as the seven-month stopgap cuts non-defense funding by roughly $13 billion and increases defense spending by about $6 billion over current budgets — including billions for deportations, veterans’ health care and the military. The House passed the bill by one vote, and 10 Senate Democrats joined all but one Republican in voting for it.
The Big Beautiful Bill. Once the issue of government funding was taken care of, Congress shifted its priorities to the “one big beautiful bill” to take care of the Trump Administration’s immigration and tax priorities. This was done through what is known as the Budget Reconciliation Process, which allows the Senate to avoid the 60-vote threshold to secure passage of a bill. The House set a Memorial Day deadline to get its version of the bill done, while the Senate set July 4.
Well, they made their deadlines and July 3 saw the final passage of HR1, what has commonly become known as the Big Beautiful Bill Act (BBBA). As referenced above, the bill was actually a budget reconciliation package passed by the Senate (with some changes) and then the House came back from recess for the final vote on July 3. The bill was signed into law on July 4.
The more than 1,000-page bill is the first major piece of legislation passed by this Congress and signed into law by President Trump. It funds most of his priorities, such as extending or making permanent many of the expiring tax cuts from the 2017 Tax Cuts and Jobs Act. Additionally, it raises the debt ceiling, cuts programs such as Medicaid and SNAP benefits, and funds his immigration agenda. The Congressional Budget Office estimates that the bill will add $3.4 trillion to the deficit in the next 10 years. Here are some items that the wine industry may be interested in:
Immigration enforcement
- $45 billion for new immigration detention centers;
- $30 billion for ICE, which will make it the largest federal law enforcement agency and makes its budget bigger than most of the world’s militaries (this will lead to more arrests and raids on agricultural businesses);
- $46.5 billion to complete the border wall;
- $5 billion for customs and border protection;
- $10 billion for “broader border security”; and
- $13.5 billion to reimburse state and local governments for immigration enforcement.
USDA programs
- $100 million per year for the Specialty Crop Block Grant program;
- $175 million per year for the Specialty Crop Research Initiative (SCRI);
- A doubling of funding for the Market Access Program (MAP) to $400 million;
- Full funding for the Technical Assistance for Specialty Crops (TASC) program;
- A permanent exemption to the AGI limitation for Title 1, disaster and conservation programs, if 75% (or more) of your income is derived from farming;
- Increased funding for the Office of Pest Management and the Plant Protection Act Sec. 7721; and
- Enhancements to the Tree Assistance Program (TAP) and crop insurance programs.
The BBB also makes section 199A of the 2017 Tax Cuts and Jobs Act permanent, which is beneficial to many small businesses and wineries. For more information on 199A, here’s a link: taxfoundation.org/blog/house-tax-bill-199a-pass-through-deduction/
The increase in ICE funding could mean we see more enforcement actions, which is concerning. On USDA, the bill actually authorized much of what would normally be in the Farm Bill, which has not been completed and is nearly two years late.
Tariffs Remain a Sticky Subject
This has been the most volatile issue for the wine industry in the first half of 2025. As everyone knows, the loss of the Canadian market has been particularly bad for the American wine industry. Canada is the number one export market for U.S. wine, accounting for 35% of all our wine exports. The ongoing trade dispute initiated by the Trump Administration had led to all American-grown and -produced alcoholic beverages to be removed from Canadian store shelves. Canada has also targeted American wine with a 25% tariff.
April 1 was the date known as “liberation day” in the Trump Administration. It was the day a 10% universal tariff was placed on all goods imported into the United States. On top of that, the Administration placed reciprocal tariffs on goods imported from specific countries. There has been a lot of stop and go with the tariffs, leading to stock market volatility and trepidation in the wine market.
The latest tariff salvo involves the European Union. Over the weekend of July 11-13, President Trump sent a letter to European Commission President Ursula von der Leyen announcing a 30% tariff on all European Union imports into the United States starting on August 1. This would include all European wine, among other goods. The new 30% tariffs would be on top of the existing 20% reciprocal tariffs already in place, placing a total of 50% in tariffs on all EU products imported into the United States. The EU ships about $6 billion in wine to the United States every year.
This is happening as negotiators from both sides are working on a deal that would lower a universal tariff rate to 10% on all EU products. The universal tariff rate was temporarily lowered to 10% to let trade negotiations take place, but President Trump issued his new threat of 30% over the weekend with the August 1 deadline. In retaliation, the EU has proposed a retaliatory tariff list that includes U.S. alcohol. For those measures to be adopted, EU countries must approve the list.
This week, the US Wine Trade Alliance, alongside Napa Valley Vintners, Wine Institute, WineAmerica, the Wine & Spirits Wholesalers of America (WSWA) and the National Association of Wine Retailers (NAWR) submitted a letter to President Trump urging officials to remove wine from the tariff proposal and return to the negotiating table to establish a stable, long-term trade agreement. We hope that can happen to avoid further damage to the wine market and our industry here in the United States.
More Updates Coming
Look for another recap at the end of the year. Who knows what might happen between now and then?
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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.
