The 10 percent tariff introduced by the United States on Australian imports including wine, is disastrous, according to Mitchell Taylor, managing director of Taylors Wines.
“It’s disastrous for the Australian wine industry and building world trade,” he says.
“This will make our oversupply situation worse as the industry is still suffering from being locked out of China for three years.
“The 10 percent tariff increase will also hit the USA three tier distribution system harder as we have to go through the importer – state wholesaler – then the final retailer before the USA consumer.
“This means that the 10 percent starts at the beginning and will be calculated with state taxes, margins and other costs so the price for the consumer will go up by at least 25 percent because it will multiply through the complicated alcohol distribution system in the over regulated USA wine market.
“The USA is also the largest wine market in the world where you need to build premium brands through international wine competitions and influential wine media and journalists like the Wine Spectator.
“This is not good news for brand Wine Australia as we attempt to diversify into other markets after the China shock of 218 percent punative tariffs.”
Mitchell says the situation may present opportunities for Australian winemakers in Canada.
“In all this mess there may be some opportunities for Australian wine in the Canadian market, as the LCBO and other government monopolies have taken USA wines off their shelves,” he says.
“However it is the uncertainty and maverick nature of Trump that makes it hard for Australian winemakers to establish support and orders with the inflationary pressures on the world economy.
“Also a world recession is not good for selling and enjoying a small luxury such as Australian premium wine.”
Australian Prime Minister said the tariff was “not the act of a friend”.
The Government will provide $50 million to affected sectors – “particularly through peak bodies such as the National Farmers Federation” – to secure and grow new markets.
“This work will be backed by five new business and investment missions to priority markets within the first 100 days of our second term,” he said.
Other countries have been hit much harder including the European Union (20 percent), China (34 percent) and Vietnam (46 percent).
Two other major wine suppliers to America, Argentina and Chile, have also been hit with a 10 percent tariff.
The tariff ignores the Australia-United States Free Trade Agreement which was signed in May 2004.
Australia exports about $24 billion of goods to the United States.
Australia exported $325 million of wine to the US in the 12 months to 31 December 2024, according to Wine Australia.
This comes at a time when Australian wine in the US is already struggling, with exports down 10 percent last year.
In the same period Australian wine exports to Canada rose nine percent to $156 million.
During his Rose Garden Liberation Day address, he singled out Australian beef.
“Australia bans – and they’re wonderful people and wonderful everything, but they ban American beef,” he said.
“Yet we imported $3 billion of Australian beef from them just last year alone.
“They won’t take any of our beef.
“They don’t want it because they don’t want it to affect their farmers and you know, I don’t blame them but they’re doing the same thing right now starting at midnight tonight, I would say.”
Trump mentioned US allies that he tok particular issue with for applying tariffs.
“Friends and foes – and in many cases the friend – is worse than the foe in terms of trade,” he said.
Recent Comments