While the market contracts in response to Trump’s aggressive tariff strategy, one niche segment may have a narrow opening: small California winemakers.New Africa/Shutterstock
Donald Trump’s aggressive tariff strategy has caused the market and consumers to recoil in shock.
While the market contracts, one niche segment may have a narrow opening: regional winemakers.
Some producers may see a renaissance as consumers look for alternatives to their imported favorites.
Alcohol consumption is down across the board, and President Donald Trump’s aggressive tariff strategy has struck a hard blow to the US economy, causing the market and consumers to recoil in shock. However, 2025 may not be a total loss for one niche segment in the booze industry.
Small California winemakers are waiting with bated breath to see if they could be one of the few lucky winners of Trump’s unconventional trade policy.
“There’s a potential upside for us here,” Nicholas Miller, the vice president of sales and marketing for Miller Family Wine Company, told Business Insider. “The US wine industry has been in a cycle of being severely oversupplied for the last couple of years — but that’s also been when there’s a big global market coming in.”
As the largest global consumer market for wine, the US is among the most desirable locations for any producer looking to sell their goods, Miller said. Hence, the market has, in recent years, been oversaturated by imported wines. But Trump’s “Liberation Day” tariffs slapped blanket 10% fees on any goods imported into the country — 20% from major wine importers like Italy and France — and Miller said that could “level the playing field” for domestic vintners.
“If tariffs do indeed slow down imports and make them less competitive, I can see that there would be an upside for domestic wines in that case,” Miller said.
Industry insiders told Business Insider that ultra-premium wine producers likely won’t see the same potential benefits from Trump’s tariff plan that lower-tier producers might because too much of their business lies in exports, which have been disrupted. The wealthiest buyers also likely won’t be significantly deterred by price hikes on their favorite French and Italian imports or will drink from their private reserves while waiting for the trade madness to subside.
“For the high-end collector, the wine connoisseur, someone with a high wine IQ, for them, those flavors are not fungible,” Miller said. “Their favorite is not replaced by a domestic wine just because it’s the same price point.”
Similarly, bottom-tier suppliers may lose some business because the lowest-income households could simply stop buying any wine, as it’s a luxury they don’t need amid the economic turmoil. Still, mid-range varietals, like those abundant in California, have a narrow opportunity to gain ground, both in direct sales and tourism to the region.
“I feel like if people are pulling their purse strings because of their worries about the economy, then they would typically — and we saw this certainly during COVID but for other different reasons — choose to come to Santa Barbara County versus taking European vacations,” Scott Bull, owner of Sustainable Wine Tours in Santa Barbara, California, told BI. “If we’re talking about wine enthusiasts in general, we’ve seen they will turn to the California market to visit their local backyard rather than taking these extravagant trips.”
California produces an average of 81% of total US wine, employs 1.1 million Americans, and generates $170.5 billion in annual economic activity across the country, according to data from the Wine Institute. The famous Napa Valley, located northeast of San Francisco, is a major tourism draw, as is Santa Barbara County on the Central Coast and the Southern California wine region of the Temecula Valley.
“For us, certainly during COVID, and we’re hoping maybe again now, is that we got the Los Angeles market and all these other people who typically would go overseas to look for those fine wines, instead coming into our backyard,” Bull said. “And they realize that we have some extraordinary wines here that really offer the same type of quality or even higher quality, and that really offer everything they’re looking for, from Burgundy to Bordeaux varietals. And so I think this could be that new introduction point.”
Of course, Trump’s tariffs do not mean it’s all smooth sailing for mid-range producers. They still have to contend with the rising costs of imported goods they rely on for production — barrels, corks, and glass for their wine bottles are all seeing significant price jumps — and their export businesses are on the rocks.
“The tariffs have also killed any chance of exporting for domestic wine producers,” Mike Officer, cofounder of Carlisle Winery, an ultra-premium Sonoma County zinfandel producer, told Business Insider. “After California, Canada and Denmark were our largest distribution channels. Those markets no longer exist for us.”
Still, Trump’s tariffs still represent a window of opportunity for some regional winemakers.
“I do think, potentially, the sweet spot is for that mid-market producer,” Miller said. “For the largest players in central California, there also could be an opportunity open up the market where previously they were getting undercut.”
The opportunity may not be limited to California winemakers. Other regional consumer goods, often regarded as modest luxuries compared to mass-produced big-brand products or fancy artisan imports — like Hawaiian coffee — could also see an increase in consumer interest amid Trump’s burgeoning trade war.
Alexandre Bossard, the general manager of Kauai Coffee, told BI the current global trade dynamics represent “both challenges and opportunities” that Hawaiian coffee growers are monitoring closely.
And while it’s too soon to know exactly how it will all shake out, California’s regional winemakers are cautiously optimistic that they can avoid the worst impacts of Trump’s trade war.
“It actually levels the playing field in a way that I think could be great for us,” Bull said.
