Trump’s ‘trade war’ affecting some local beverage businesses
AUSTIN (KXAN) – Tariffs and threats of tariffs are affecting businesses across the U.S. including in Austin.
Last week, the Trump administration threatened to put a 200% tariff on alcohol coming from Europe in response to a European Union proposal to put a 50% tariff on America-made whiskey. This tariff threat follows a 25% tariff President Donald Trump put on aluminum and steel imports from Canada.
“It’s frustrating,” said Ross McLauchlan, CEO of the Austin Winery. “What we're not having is stability from an economic perspective, [in terms of] our trade with our nearest partners,” he added. “That has a major effect on small businesses [and] large businesses, not just exporters and importers.”
The Austin Winery produces a great deal of Texas wine. It’s popular among Texans, but McLauchlan said they sell much of their product to wine lovers in Canada and Europe.
“Ironically, Texas wines are very exotic to the Canadian and European markets. We also sell to Hong Kong and Japan,” McLauchlan said.
When the trade war took off, McLauchlan said they saw an immediate drop in sales to international consumers.
According to Canadian-owned market researcher Leger, two-thirds of Canadians have reduced their purchases of American products, both online and in stores.
“There's been a complete boycott on American wine products [and] spirits to Canada,” McLauchlan said. “It’s sad that we’ll have that loss.”
McLauchlan said with the decline in international purchases, he’s been in search of new markets that might appreciate his Texas wine.
“We’re doing our best to mitigate [the loss] and focus on our local environment,” McLauchlan said.