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Canada Tariffs Paused, But California Wineries Fear a Trade Dispute Would Be Crushing

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Clusters of ripe grapes hang on the vine at a vineyard in Napa, California, on Sept. 30, 2024. Though President Donald Trump and Canadian Prime Minister Justin Trudeau came to a temporary agreement on Monday, winemakers worry about the economic fallout if they lose Canada as an export partner. (Beth LaBerge/KQED)

California’s wineries are bracing for an uncertain future after President Trump reached an agreement with Canadian Prime Minister Justin Trudeau on Monday to postpone tariffs for 30 days, averting, at least temporarily, a potential trade war that had threatened to upend importers and exporters.

Trump, over the weekend, had signed off on 25% tariffs on Canadian imports, which were to take effect Tuesday, and Trudeau swiftly responded with 25% tariffs on more than a billion dollars worth of U.S. goods.

Although Monday afternoon’s agreement signals more talks are forthcoming, California winemakers worry about the economic downturn that could ensue should the delay end on a sour note.

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After Trump’s initial tariff announcement, several Canadian provinces announced plans to pull U.S.-made alcoholic beverages from their shelves altogether.

“Every year, [the Liquor Control Board of Ontario] sells nearly $1 billion worth of American wine, beer, spirits and seltzers. Not anymore,” said Ontario Premier Doug Ford in a statement on Sunday morning, ordering the products removed by Tuesday.

A man wearing a white cowboy hat stands in between green grapevines with his back facing the camera. He looks toward an orange tractor coming down the dirt row as it trims grapevines.
A vineyard worker for Napa Valley winemaker Hill Family Estate looks at a tractor trimming grapevine branches on June 4, 2012. (Kimihiro Hoshino/AFP via Getty Images)

The California Wine Institute, which lobbies on behalf of hundreds of California wineries, released a statement on Monday urging for a resolution of the trade dispute, citing the potentially massive repercussions that Canada’s retaliatory action could have on the U.S. wine industry.

“Canada is the single most important export market for U.S. wines with retail sales in excess of $1.1 billion annually,” said Robert Koch, the California Wine Institute’s president and CEO.

Michael Haney, executive director of the Sonoma County Vintners group, welcomed the news of a deal on Monday.

“We are pleased to hear that both the United States and Canada have announced an agreement that pauses the tariffs and trade actions that included wine and would have impacted consumers, our wine industry and communities,” he said. “We hope this agreement is just the first step to a more permanent agreement that prevents potential tariffs and trade actions in the future.”

Haney emphasized the damage that tariffs and reduced exports could have on not only wineries but industries across the board.

“These actions are going to impact not just our wine and our wine industry and wine community, but consumers, hospitality workers, farmers and our communities as well,” Haney said. “There’s a great concern about that.”

In an already challenging economic environment, Sonoma County Vintners has been bracing for these consequences for months, Haney said, and they certainly haven’t been alone.

Canada is one of the Sonoma and Napa wine region’s biggest export partners, according to Haney. Since Sonoma County vineyards are 85% family-owned, he said, the impact that a trade dispute could have on small businesses and families is devastating.

British Columbia’s Premier David Eby also announced this weekend that the province’s liquor distribution branch will stop purchasing alcohol from U.S. states led by Republican governors.

Tariffs go way beyond political bounds. They’re going to affect Democrats. They’re going to affect Republicans,” Haney said in response. “They’re going to affect Democratic farmers and Republican farmers and Democratic winemakers and Republican winemakers.”

Haney said he’s hoping for a permanent agreement that will keep California wines on Canada’s shelves.

“Let’s take politics out of it,” he said. “We have to remember and keep our consumers, our trade, our communities all in front of our minds here because those are the ones that are going to feel this the most.”

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