US Tariffs. according to the Government, a 10% rate would not be impactful, but for most wineries the risk is high

There are only a few days left to negotiate further on US tariffs (the deadline is set for 9 July), but according to the political world, the aim is to settle the matter at 10%. “I don’t think the 10% measure would be particularly impactful for us,” said Prime Minister Giorgia Meloni in recent days, echoing the words of Economy Minister Giancarlo Giorgetti: “It would be wise to close the tariff issue at 10%.”

However, not everyone seems to agree. The Vice President for Labour and Industrial Relations at Confindustria, Maurizio Marchesini, told Sky TG Economia that it would be a disaster: “A 10% tariff, combined with a 10% devaluation of the dollar, is a kind of tragedy.”
But what does the wine industry think?

Significant damage for 77% of wine companies

According to a survey by the Italian Wine Union (Unione Italiana Vini - UIV) Observatory involving major companies in the sector, the impact would be significant in 77% of cases: “medium-high” for 61% and “very high” for 16%. In terms of turnover, the estimated loss would range between 10% and 12%, also influenced by the euro/dollar exchange rate. The main reason is clear: 90% of the companies interviewed (whose combined turnover exceeds €3.2 billion) believe that consumers would not be able to absorb the extra shelf cost caused by the 10% tariff.

Small businesses would be hit the hardest

"The damage would be very real," comments UIV President Lamberto Frescobaldi, “not only for our companies but also for the US commercial chain, which generates $4.50 for the American economy for every dollar invested in European wine. In Italy, small businesses – many of which send up to 50% of their turnover overseas – will be particularly penalised, as well as flagship denominations in the US such as Moscato d’Asti, Pinot Grigio, Chianti, Prosecco, Lambrusco, and others.”

Why American consumers might give up wine

After all, wine is not a staple good. And as is well known, in times of uncertainty, these are the very products consumers begin to cut back on, as Frescobaldi points out: “The wine sector is among the most exposed to the increase in trade barriers, firstly because the share of exports to the US reaches 24%, compared to an average of just over 10% for Made in Italy, but also because wine is a discretionary good and therefore more likely to be abandoned by consumers.”

US wine consumption is already showing the first signs of impact: down 10% in May alone. Meanwhile, Italian exports in April (the first month with 10% tariffs) show a 7.5% drop in volume.
Still convinced that resolving the tariff issue at 10% will be non-impactful?