Trump's wine tariff threat is souring Philly's restaurant scene

What they're saying: "It would be catastrophic — that's kind of like a nuclear bomb would go off for the wine restaurant, wine retail industry," Jason Malumed, managing partner for wine importer and distributor MFW Wine Co., tells Axios.

• Some importers, including Malumed — who distributes wine to some of Philly's most popular restaurants, such as those from Stephen Starr and Marc Vetri — are already canceling some wine purchases from Europe.
• "We're at a standstill until we have a better idea," he said. "No one really knows what to do."

Driving the news: Trump is expected to unveil broad tariffs on imports from Europe and beyond on Wednesday, though the exact details are unknown.

• A 25% tariff on imported automobiles and auto parts announced this week is just the latest in a dizzying string of escalations over the last few days.

Reality check: The 200% wine tariffs probably won't ever get imposed, Axios' Felix Salmon writes.

• The threat of tariffs has been described to Axios by a White House official as a negotiating position rather than an attempt to kill a whole industry.
• French politicians are already suggesting walking back the proposed tariff on U.S. whiskey, which triggered Trump's initial response.

Yes, but: Even smaller tariffs could hurt the industry.

• Case in point: 25% tariffs imposed in 2019 resulted in French wine imports falling by 54% and German imports by 42%.

By the numbers: Wine from E.U. countries made up at least a quarter of Pennsylvania retail sales at Fine Wine & Good Spirits stores and to alcohol license holders, like restaurants, from July 2024 to March 20, per data from the state Liquor Control Board.

• Italian wine accounted for the highest share of European sales, at 18%, followed by France (5.3%) and Spain (3%).

The big picture: U.S. wine importers spent $6.8 billion to bring wine into the country in 2024, 80% of which went to producers in the European Union, per the American Association of Wine Economists.

• Pennsylvania bought $19 million worth of wines from France last year alone.

Zoom in: Uncertainty over the tariffs is already wreaking havoc on the industry, Chloé Grigri, who co-runs Philly-based Bad Baguette Hospitality, which includes Good King Tavern and newly opened Supérette, tells Axios.

• Wine retailers and restaurants like hers are unsure about the availability of E.U. wines in the coming weeks and what they'll cost.
• "There's a big question mark," she says.

Dan Solway, a Philly-based sommelier and wine specialist who runs supper clubs and classes, tells Axios that tariffs could raise prices and slash options, while hurting bottle shops and small businesses.

• Solway questioned whether his business could survive the added costs brought on by tariffs and fewer wine options.

What we're watching: The Pennsylvania Liquor Control Board, which regulates all aspects of the import and sale of wine and spirits here, is opting to take a wait-and-see approach to the tariff threats, agency spokesperson Elizabeth Brassell tells Axios.

• "We don't know how importers may respond to the tariffs over time, whether they choose to absorb or pass on the additional costs, or some combination of both," she said.

The bottom line: "Everyone's kind of waiting with bated breath," Solway says. "The ripple effect is just massive."