A tariff on imported wine can cost the consumer more dollars than the duty collected at the border. Percentage-based markups can multiply the added dollar cost as it moves downstream. That does not mean a 10% tariff automatically becomes a 15–20% increase in the shelf price.
Consider a simplified illustration with no other costs: a $10 import value becomes a $20 shelf price after a combined markup factor of two. A 10% tariff adds $1 at import. Applying the same factor produces a $22 shelf price: $2 more, but still a 10% increase. Different costs, margins and pricing decisions change the result.
NBER research on the 2019 European wine tariffs found that consumers paid more in added dollars than the tariff revenue collected [1]. It supports examining markups and pass-through along the chain, not applying a universal shelf-price multiplier to a tariff percentage.
Correction, October 19, 2026: the original headline confused amplification of dollar cost with the percentage change in shelf price. The example above clarifies the distinction. The policy discussion below reflects the article's March publication date; use current broker-confirmed rates for purchasing.
The Pass-Through Problem
In conversations across the industry, the pattern is consistent: costs are being passed through. Some foreign producers are offering discounts to soften the blow, but those are limited and temporary. At the distributor and retailer level, the tariff cost flows downstream because there's no margin left to absorb it.
But here's where it gets complicated. Not everyone passes costs through at the same speed. Some importers adjust pricing within weeks. Others — particularly in franchise states with price posting requirements — can take months. In New York, for example, wholesale price postings are due by the 25th of the month, two months before the month of sale [2]. That's a built-in lag. When tariff rates shift mid-cycle, the posted price is already "wrong" before the product moves.
The result is that at any given moment, different parts of the supply chain are operating on different cost assumptions. Some operators have already priced in the tariff. Others are still selling at pre-tariff margins without realizing it. And almost nobody has visibility into where the discrepancies sit across their network.
A Year In: Business as Usual, But Blurrier
When the first wave of tariffs hit in early 2025 — around Liberation Day — the industry reacted visibly. Importers rushed to bring in inventory ahead of deadlines. Others froze purchasing decisions, waiting for clarity. A year into the volatility, that kind of reactive behavior has largely faded. Nobody is pausing orders anymore. The uncertainty has become the baseline.
But "business as usual" doesn't mean the problem is solved. It means the problem has become structural. US wine exports fell 33.5% in 2025 — from $1.3 billion to $850 million, the first time below $1 billion since 2009 [3]. Exports to Canada alone dropped 78%, a $357 million loss driven almost entirely by tariff retaliation. Meanwhile, the US collected roughly $492 million in wine tariff revenue [4] — nearly equal to what the industry lost in exports.
The current Section 122 tariffs are the latest iteration — a 10% ad valorem duty that took effect February 24, 2026, after the Supreme Court struck down the IEEPA tariffs on February 20 [5]. The rate is lower than what came before. The disruption is not.
The Visibility Gap
This is what makes the tariff situation a supply chain problem, not just a trade policy problem. The three-tier system doesn't just amplify costs — it amplifies the delay in seeing those costs. When you can't see where a tariff is being absorbed versus passed through, when pricing lags reality by months in regulated states, when your suppliers and distributors are all operating on different timelines — you can't make fast, informed decisions.
The NBER researchers found that retail prices took approximately 12 months to fully reflect the 2019 tariffs [1]. A full year of misaligned pricing across the chain. That's not a tariff problem. That's a visibility problem.
The operators who navigate this best won't be the ones with the lowest tariff exposure. They'll be the ones who can actually see what's happening across their supply chain in something closer to real time — and adjust before the math catches up with them.
References
[1] Flaaen, A., Hortacsu, A., Tintelnot, F., Urdaneta, N. & Xu, D. "Who Pays for Tariffs Along the Supply Chain? Evidence from European Wine Tariffs." NBER Working Paper No. 34392. https://www.nber.org/papers/w34392
[2] New York State Liquor Authority. "Price Posting." NY ABC Law, Section 101-b. https://sla.ny.gov/price-posting
[3] US Census Bureau, Annual Trade Data (2025). Reported by Robb Report: "U.S. Wine Exports Plummeted by $428 Million in 2025." https://robbreport.com/food-drink/wine/us-wine-exports-fell-33-percent-1237578978/
[4] American Association of Wine Economists (AAWE), based on US Census Bureau / USA Trade Online data. Reported by VinePair: "U.S. Census Report Shows Wine and Beer Exports Collapsed by $472 Million in 2025." https://vinepair.com/booze-news/census-report-us-alcohol-imports-decline-by-millions/
[5] Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026). Decided February 20, 2026. Section 122 tariff details: Hillebrand Gori, "US Alcohol Import Tariffs and Reciprocal Tariffs Update." https://www.hillebrandgori.com/media/publication/us-alcohol-import-tariffs