Tariff risks US market crash for humble Aussie | Australian Markets

US tariffs on Australian wine might deal a main blow to entry-level exports, with the industry fearing costs will rise enough to risk a key market being swallowed up by bulk American wine.

The blanket 10 per cent tariff on all wine despatched to the US — which is the nation’s third-biggest export market — may have a profound affect on a sector nonetheless struggling after three years of Chinese tariffs, Taylors Wines managing director Mitchell Taylor stated.

“The trade minister rang me and pointed out how we did very well, relatively, but the industry has been going through the most difficult time in the 40 years I’ve been in it,” the South Australian winemaker stated.

About 80 per cent of the wine going into the US market is entry degree, and the ten per cent tariff “multiplies all the way up the alcohol distribution chain” in keeping with Mr Taylor.

“All of a sudden, the $5-7 bottles will be up over $10 and the excess, cheap California wine will just come in and swallow up that market,” he stated.

Australia exported $325 million of wine to the US in 2024, in keeping with Wine Australia.

DMG Fine Wine managing director William Dong stated there was aid that the tariffs weren’t 20 per cent-plus because the industry had feared.

Yet it can nonetheless significantly affect entry-level wine producers because the market turns into more price-sensitive and shoppers cut back on spending, he stated.

Australia was in a higher place than markets reminiscent of Europe the place the tariff ranges imposed are a lot larger, in keeping with Mr Dong.

“Consumers will be open to exploring more affordable alternatives that still deliver quality and provenance. We have a unique opportunity to provide that and gain a foothold in the market,” he stated.

The chaos and uncertainty created by President Donald Trump creates havoc within the provide chain, Mr Taylor stated.

“So it’s very hard to get orders from not only the US, but from other countries because consumer confidence goes south when you’ve got all these inflationary pressures and talk of a world recession,” he stated.

One constructive is potential within the Canadian market as a result of the Liquor Control Board of Ontario has taken all US wines off their cabinets, in keeping with Mr Taylor, who stated authorities assist would needed.