United States President Donald Trump this week announced his administration’s ‘Reciprocal Tariffs’ policy which will hit Australia and other global trade partners with a baseline tariff of 10 per cent on all US imports from 5 April 2025.
The tariffs will be applied to all Australian liquor imports to the US; however, the local wine industry expects to take the biggest hit after only recently recovering from the devasting tariffs imposed by China in March 2021, which were only recently lifted in March 2024.
Lee McLean, CEO of Australian Grape & Wine told The Shout; “We are disappointed by President Trump’s decision to apply a 10 per cent blanket tariff on Australian wine. There is no justification for imposing tariffs on a product from a long-standing ally and fair-trading partner of the United States.
“This is yet another blow to a sector that is already under sustained pressure from global oversupply, declining demand, and ongoing recovery from disrupted trade with China. The 10 per cent tariff adds to the cost of doing business in one of our most important markets and creates further uncertainty for producers.”
However, ASX listed company Treasury Wine Estates had a different response, reassuring investors that; “TWE does not anticipate these measures to have a material impact on its business.”
The company said this is a result of its American division contributing to around 36 per cent of the group’s earnings.
But more importantly, almost 85 per cent of wine sold in the US is produced there.
McLean said that wine consumers in the US will also feel the effects of the tariffs.
“Ultimately, it will also hurt American consumers by increasing the price of wines they know and enjoy, adding to cost-of-living pressures. Trade disruptions of this kind are damaging for everyone involved — they are lose-lose scenarios for business and consumers alike.”
Prime Minister Anthony Albanese this week addressed Australians calling the tariffs “totally unwarranted” and shared a similar sentiment to McLean.
“It is the American people who will pay the biggest price for these unjustified tariffs. This is why our government will not be seeking to impose reciprocal tariffs. We will not join a race to the bottom that leads to higher prices and slower growth. We will stand up for Australia. We will continue to make the strongest case for these unjustified tariffs to be removed from our exporters,” he said.
McLean said Australian Grape & Wine is working to protect the interests of the industry by collaborating with the Australian government and international counterparts.
“This latest trade disruption reinforces the urgent need for government and industry to work together to build resilience, diversify export markets, and grow demand for Australian wine here at home,” he said.
Albanese reassured the public that his government is on the side of Australians. “These are uncertain times, but Australians can be absolutely certain of this – our government will always stand up for Australian jobs, Australian industry, Australian consumers, and Australian values,” he said.