Economy

This retailer ordered 35,000 cases of French wine to brace for possible tariffs

Key Points
  • The U.S. has threatened to increase the tariffs it has imposed on French wine to up to 100%.
  • Moore Brothers Wine Co, which operates in three states, ordered 35,000 cases, or a year's supply, to try to get ahead of the possible duties.
  • U.S. officials have been engaged in a trade war on multiple fronts as they seek to fix global imbalances.
Bottles of French wine are displayed for sale in a liquor store on December 3, 2019 in Arlington, Virginia.
Olivier Douliery | AFP | Getty Images

Though it's not clear yet whether massive tariffs against French wine will take effect next month, Moore Brothers Wine Co. isn't taking any chances.

The retailer, which operates in New York, New Jersey and Delaware, ordered more than 35,000 cases of imported wine to be delivered by Feb. 1, just in case the White House follows through on its threat for tariffs that could be around 100% and levied on a host of other goods.

"It's just really terrible," said David Moore, a co-owner of the sprawling business. "But what we hope to do is make sure that we aren't doubling prices overnight."

Wine imports from the European Union already face 25% duties, but the Office of the U.S. Trade Representative has floated the idea of hiking them to 100% as part of an ongoing battle over tariffs on Airbus airliners. The USTR did not respond to a request for comment.

Though the U.S. and China have worked out a "phase one" deal of their respective tariff battle, the wine issue is just one of many unresolved trade issues around the world.

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The Federal Reserve's latest "Beige Book" update on economic conditions in the various districts around the country, released Wednesday, contained 17 references to tariffs. "In many Districts, tariffs and trade uncertainty continued to weigh on some businesses," it says. The report specifically mentioned an unnamed retailer in the Philadelphia area that had loaded up on wine to fend off the potential dramatic increase in costs.

For Moore's business, tariffs have a huge knock-on effect, from the vintners in the French countryside to the shipping industry to customers and employees.

"If the tariffs go into effect, it's not just some little guy in France who's not going to be able to sell his wines to the U.S.," he said. "It's going to put us out of business, and we have 35 employees. We're not the only ones. There are going to be hundreds of distributors who are smaller."

In all, Moore estimates that the tariffs could cost more than 100,000 jobs, though industry estimates have been smaller.

That's why he's bracing now for the impact.

"We hope it's a year's supply," he said of the big order. "You don't want to have a rose that you sold last year for 20 bucks to be 40 bucks. You ain't gonna sell that. The whole thing is just crazy. We await the return of the adults in the room."