Italian wineries, partners scramble to avoid new tariff rate.

Late on Thursday last week, the wire came in: the new tariff rate for all goods from the EU rose to 15 percent, a five-point increase from the 10 percent that had been imposed since April (before the current administration, the rate was 2.5).

For those inclined to read the fine print (read the entire White House statement here), there was also a vital piece of info: for European wines to avoid the new tax rate, they would need to be “on the water” by end of day on Wednesday, August 6.

As a result, Italian wineries and the partners are scrambling to get their wines to Livorno (where most wine is shipped from Italy) no later than 12:01 a.m. on August 7 (EDT).

The wine must arrive in the U.S. on or before October 5. In the case of a mishap or delay (caused by, say, rejected paper work), importers will be on the hook for the new tax. It’s risky.

And the danger is compounded by the fact that the dollar is growing weaker against the Euro.

I’m seeing numerous reports of importers asking their suppliers to lower costs to assuage the tariff pain. Today, they are counting on even more support from bottlers. On both sides of the Atlantic, actors are hanging in there. But there is a growing sense that the situation is not sustainable, especially now that the 15 percent tax will likely stay in place for a while as the dollar continues to decline.

In recent weeks, I’ve been asked by clients to join marketing/sales calls with Asia and northern European countries. Italians are increasingly looking to markets beyond the U.S. to rebalance their businesses.

Remember when Trump 1.0 essentially decimated the Burgundy market in the U.S. as growers pivoted to Asia? As supply dwindled, prices skyrocketed. In many cases (excuse the pun), only the ultrarich can afford the wines today. As Italians look beyond Trump’s America (which they increasingly disdain), similar patterns might emerge for italo-centric oenophiles.

There is so much uncertainty facing European winemakers and their U.S. partners today. The only thing they know for sure is that the European wine industry will be radically and indelibly reshaped by current U.S. policy and its wishy-washy execution.