Trump Canadian Trade ‘Tantrum’ Imperils Oregon’s Largest Export Market for Wine
The headlines tell the story. “With Trump tariffs, Oregon wine is over a barrel”. “Oregon wines are collateral damage in on-again, off-again U.S.-Canada trade war”. “Topsy-turvy trade war has Oregon wineries out in the Canadian cold”.
All you need to know is that 46 percent of Oregon winery exports, or 72,641 cases of wine in 2023, went to Canada. In response to the tariff war instigated by President Trump, Canadian importers now reject shipments of Oregon wine.
For Anne Amie Vineyards in Carlton, the news was shattering. Winemaker Jay Somers told The Oregonian that a nearly completed deal with a Quebec importer fell through at the 11th hour because of Trump’s tariffs on Canada. The loss was in the thousands of cases of wine per year.
Canadian Consumers Buy Local
It wasn’t just the tariffs that killed the deal, Somers explained. “[Our Canadian importer] said they didn’t want to put us in a position where nobody would buy our wine because it was American.”
Even when the tariff was paused, Canadian consumers continued to reject Oregon wines, much in the same spirit as booing the National Anthem at NHL hockey games with American teams.
A Vancouver, BC nightclub owner decided to pull all U.S. products, including wines from two dozen Oregon wineries. “They put the decision on Facebook, and it got a ton of positive comments,” said John Clerides, owner of Marquis Wine Cellars in Vancouver.
Clerides added, “Canadians are tired of being pushed around by the ‘big brother’ in the south and buying local is their way of putting their foot down.”
Ripple Effects of Tariffs
Randy Stapilus, who writes commentaries for the Oregon Capital Chronicle, said, “Wine is a smaller part of Oregon’s trade picture than some other commodities, but it offers a useful insight into how the tariffs are affecting the state. And it is a major industry in Oregon, with about 1,100 wineries statewide.”
There will be ripple effects of the hit taken by Oregon wineries, as Stapilus quoted the U.S. Wine Trade Alliance: “Restaurants will suffer, domestic producers will face new obstacles in bringing their wines to market and retailers, importers and distributors across the country will be place at serious risk.”
Howard Rossbach, who owns three Oregon wine brands, is a poster boy for how tariffs and the Canadian reaction have impacted the state’s wine industry. “I sell from coast to coast to coast in Canada, and I annually sell 1,500 cases of my Citation and Centerstone wines to Ontario alone,” Rossbach told The Oregonian. Like other Oregon wineries, Canada is his biggest export market.
Rossbach says he was representing his wines at the Victoria International Wine Festival in British Columbia days before Trump’s initial tariff announcement. Rossbach said Canada’s response to Trump’s tariff would be “an absolute clobbering of my business.”
Tax on Tariff Impact
“Because the 25 percent tariff is imposed at the point of entry, before the British Columbia Liquor Distribution Branch mark-ups and other taxes, the total impact after the ‘tax-on-tax’ multiplier effect will be more like a 35-40 percent increase in the price of wines from California and other U.S. wine growing regions,” explains Megan O’Neill, a senior associate at Farris LLP in Vancouver, British Columbia.
Dai Crisp, co-owner of Lumos Wine in Philomath, called that price increase “massive.” “Who’s going to buy those wines? I wouldn’t,” Crisp said.
Crisp called predictability and stability “super vital” when developing business relationships. “When you finally find solid distribution partners that pay on time, then you can tune your production to the needs of those markets,” he explained. With tariffs and the threat of tariffs, predictability and stability are elusive.
John Grochau, co-owner of GC Wines in Portland, says his partners in Quebec have a seaport, making it easy to replace his wines with wines from France, Italy and Spain. “They could eventually just get tired of getting jerked around and say ‘see you later.’ This volatility just to suit one man’s ego is maddening,” Grochau says. “This is a trade tantrum, not a trade war.”
Oregon Beer and Cider Impacted, Too
The “No thanks” response in Canada to Oregon wine will likely spread to include Oregon beer and hard ciders, as well as other products branded as “American”.
One producer lamented, “The myth of friends and allies forever has been busted. Few Canadians I know will fall for that ever again.”
A Canadian wine drinker wrote on social media, “Even when this ends, I can’t imagine buying American again.” Another said, “The North remembers.”
Someone using the tag of Amerigo_Vespucci teased, “Time for Great Province of Oregon and Washington to join the Canadian Federation.”
Oregon Wine History in Canada
Oregon Pinot Noir became popular in Canada in the early 1990s. “They found a niche audience, somewhere between the big fruit wines of Napa and Sonoma and the more reserved and elegant Pinot Noir of Burgundy,” recalls Malcolm Jolley.
‘The prices ranged from $20 to $200, but my estimate of a median range would be between $30 to $50 a bottle,” he recalled. “A wine at that price point might be described as an affordable luxury. A step up from everyday wine, it might be bought off the shelf as a reward at the end of the work week, or ordered at a restaurant at roughly twice the retail price.”
Oregon produces lots of wine that costs less than an affordable luxury, Friday night wine. But those are the kind of wines they tend to export, Jolley says. “It makes sense for Oregon to market wines in this price range. Pinot Noir is the grape that dominates the state’s vineyards. Though it is more than evidently suited to the Oregon terroir, it’s also notoriously fickle and difficult to make cheaply. So, in this way the supply is there and ready for the demand.”
“If Oregon were a country, its production of wine would be comparable to all of Canada’s,” Jolley argues. “The good news is that Oregon’s relatively low production affects its export strategy in a way that benefits Canadian wine drinkers.”
“While it might be prestigious to export to a wine-loving country like France, for volume reasons, it’s not very practical,” Jolley explains. “Even before the challenge of building a brand for Oregon wines and marketing them abroad, they’d have to be shipped. In North America, they only needed to be trucked.”
That special Friday-night wine bond between Oregon wine country and Canada has been disrupted, perhaps permanently.
