The Impact of Trump’s Tariffs on the Wine Industry: Past and Future
The wine industry faced significant challenges due to tariffs imposed by President Trump’s first administration. During the presidential campaign, and since his election on November 5, 2024, President Trump has made it clear that he will enact higher tariffs as a key part of the political agenda of his second administration. A few days ago, he nominated Jamieson Greer as his pick for U.S. Trade Representative as the nation’s top trade official, who served as chief of staff to Robert Lighthizer, then U.S. Trade Representative during Trump’s first term; if confirmed by the U.S. Senate, Mr. Greer is expected “to pursue an ambitious trade agenda.” This post highlights the history of Trump’s tariffs on wine, their effects, and what might be expected in his new term.
Trump’s First Term: A Retrospective
In October 2019, the Trump administration imposed a 25% tariff on still wines under 14% alcohol by volume from France, Germany, Spain, and the United Kingdom. These tariffs were part of a broader trade dispute with the European Union over subsidies to aerospace companies. The tariffs led to increased costs for importers, distributors, and ultimately consumers, causing significant disruption in the wine market.
Notable Effects of the 2019 Tariffs:
Increased Prices: The cost of European wines in the U.S. rose, leading to higher prices for consumers. The tariffs specifically targeted alcoholic beverages. However, supplies such as barrels and other equipment were not subject to them.
Market Shifts: Some European producers adjusted their products to avoid tariffs, such as by increasing the alcohol content of their wines.
Economic Impact: The tariffs strained relationships with European trade partners and led to retaliatory tariffs on American products. For instance, the European Union imposed a 25% tariff on American whiskey and Harley-Davidson motorcycles.
Potential Tariffs in Trump’s New Term
As Trump begins his new term, there is speculation about the potential for new tariffs and their impact on the wine industry. Trump has indicated a willingness to impose even higher tariffs on a broader range of products. Here are some possibilities:
Broader Tariffs: Trump has suggested tariffs as high as 100% on goods from China and 25% on goods from Mexico and Canada. When Trump imposed tariffs on China in his first administration, in April 2018, China retaliated by imposing a 15% tariff on U.S. wine. Thus, broader tariffs in Trump’s second administration could impact (directly or indirectly) the wine industry.
Economic Consequences: Higher tariffs could lead to a “long-term war” in trade, affecting thousands of jobs and causing economic instability.
Industry Response: The wine industry is already preparing for potential disruptions. Importers and retailers are considering stockpiling European wines to hedge against future price increases.
The Broader Economic Context
The potential for new tariffs comes at a time when the global economy is already facing significant challenges. The COVID-19 pandemic had already disrupted supply chains and led to economic slowdowns worldwide. In this context, additional tariffs could exacerbate existing problems and create new ones.
Supply Chain Disruptions: The wine industry relies on a complex global supply chain. Tariffs can disrupt this chain by increasing costs and creating uncertainty.
Consumer Behavior: Higher prices for imported wines may lead consumers to switch to domestic alternatives or reduce their overall wine consumption.
Global Trade Relations: Tariffs can strain relationships between countries and lead to retaliatory measures, further complicating international trade.
Industry Strategies and Adaptations
The wine industry has shown resilience in the face of past challenges and is likely to adapt to new tariffs as well. Some strategies that industry stakeholders might employ include:
Diversifying Supply Chains: Importers may seek to diversify their sources of wine to reduce reliance on countries subject to tariffs.
Product Adjustments: Producers might adjust their products to avoid tariffs, such as by changing the alcohol content or packaging size.
Advocacy and Negotiation: Industry groups may engage in advocacy efforts to influence trade policy and negotiate for more favorable terms.
Conclusion
The wine industry faces significant uncertainty as President Trump begins his new term. The tariffs imposed during his first term had far-reaching effects, and new tariffs could exacerbate these challenges. Industry stakeholders are bracing for potential economic fallout and preparing strategies to mitigate the impact. As the situation evolves, the wine industry will need to navigate these complexities to maintain stability and growth.
The future of the wine industry under Trump’s new term remains uncertain, but one thing is clear: the industry will need to remain adaptable and resilient in the face of ongoing challenges. By understanding the potential impacts of new tariffs and preparing accordingly, the wine industry can continue to thrive despite the obstacles it may encounter.
Healthcare Preview for the Week of: January 13, 2025 [Podcast]
Final Week of Biden Administration
During the Biden Administration’s final week, congressional Republicans are moving full steam ahead with Senate confirmation hearings for Trump-nominated officials and with ongoing budget reconciliation discussions. Nomination hearings this week include Doug Collins for secretary of Veterans’ Affairs and Russell Vought for Office of Management and Budget (OMB) director. Hearings have yet to be scheduled for Robert F. Kennedy Jr., nominated for Health and Human Services (HHS) secretary, and other HHS agencies.
We are waiting to see if certain Biden Administration proposed rules, some of which have cleared OMB review, will be finalized this week, before President-elect Trump is inaugurated on January 20, 2025. These proposed regulations include the Marketplace Notice of Benefit and Payment Parameters, a regulation that would require coverage of over-the-counter contraception without cost-sharing or a prescription, and a rule on telemedicine prescribing of controlled substances, among others. Other proposed regulations with comment periods still open, including the 2026 Medicare Advantage policy and technical rule, could be substantially changed when Trump takes office.
Looking ahead to the new Administration, congressional Republicans are eyeing healthcare policies as potential savers for their forthcoming budget reconciliation, which is expected to target significant cuts in federal spending. At a December 2024 Republican conference meeting, $2.5 trillion in mandatory spending cuts were put on the table in exchange for a $1.5 trillion increase in the debt limit. The Congressional Budget Office (CBO) recently released options for reducing the deficit; CBO periodically releases such options, providing legislators with price tags for various policies. Healthcare options outlined by CBO include a version of Medicare site neutral payment reforms, Medicaid per capita caps, and a reduction in payment rates for 340B entities. The House Budget Committee also circulated a spending reform options document late last week detailing up to $5.7 trillion in savings. Healthcare is a primary target for savings as it makes up almost $3.5 trillion of the total figure, with $2.3 trillion coming solely from Medicaid savings.
The key House and Senate healthcare committees (Senate Finance; Senate Health, Education, Labor and Pensions; House Energy and Commerce; and House Ways and Means) are officially formed for the 119th Congress, with new members on both sides of the aisle for all four committees. The House Rules Committee is still without a chair, however, and other committees, including the House Education and Workforce Committee, are not yet formed.
Today’s Podcast
In this week’s Healthcare Preview podcast, Debbie Curtis joins Maddie News to discuss the final week of the Biden administration and the week ahead in the 119th Congress, with the Senate focused on confirmation hearings for Trump-nominated officials, and Congressional Republicans eyeing healthcare policies as potential savers for upcoming legislation.
Navigating the Complexities of Pay Transparency Legislation
Employers are paying close attention to pay transparency laws, which are the latest trend in employment legislation. Often expanding on existing pay equity laws, many state and local governments have enacted or proposed legislation with the stated goal of reducing pay inequity and combating wage discrimination.
Hawaii and Washington, DC, each passed legislation that went into effect in 2024. Illinois and Minnesota rang in the new year with pay transparency legislation which took effect on January 1. And Massachusetts and New Jersey each passed laws which will take effect later in 2025.
The Salary Transparency Act is currently pending before US Congress. If passed, it would amend the Fair Labor Standards Act (FLSA) and make it unlawful for an employer to fail or refuse to disclose the wage or wage range for a position in a job posting, employee opportunity, or upon hire, and at least annually. The federal law would apply to all employers in the United States. The Act is in the very early stages of consideration and has not yet passed the US House or Senate.
Pay transparency laws typically require employers to disclose the wages or wage range for a particular position to current and/or prospective employees. However, each state’s transparency law differs slightly in its application, including which employers are covered, when employers must disclose pay ranges or other details, and to whom employers must disclose them. For this reason, multi-state employers may find it challenging to comply with their obligations, an issue compounded by an increasingly dispersed and often remote workforce for many employers.
FAQs
Do pay transparency laws apply to internal transfers or promotions?
Many states with pay transparency laws require employers to disclose the applicable wage range to existing employees offered a promotion or transfer. For example, laws in Connecticut, New York, and Massachusetts require employers to disclose a pay range in the event of an existing employee’s internal promotion or transfer. On the other hand, California and Hawaii’s disclosure requirements do not apply to internal promotions or transfers, and instead, focus solely on disclosures for external job postings and communications to potential new employees.
Can current employees request pay ranges for their current jobs from their employers?
In addition to requiring disclosures of wage ranges to applicants for employment, certain states also permit current employees to make reasonable requests to their employer with respect to the pay range for their current role. For example, the Massachusetts law requires employers to provide the pay range for a specific employment position to an employee holding that position, or to an outside applicant for the position, upon request. For a more comprehensive look at the forthcoming Massachusetts pay transparency law, you can read our full alert on the topic here.
How do pay transparency laws apply to remote workers?
State laws differ as to whether they require employers to apply pay transparency statutes to remote workers. Colorado, for example, has issued explicit guidance with respect to remote employees. The Colorado Department of Labor and Employment (CO DLE) clarified that the pay transparency rules apply to job postings for work tied to Colorado locations or remote work performable anywhere, but not to work performable only at a non-Colorado worksite. The CO DLE’s guidance further clarifies that postings for remote positions that can be performed anywhere are subject to the requirements in Colorado’s pay transparency law, the Equal Pay for Equal Work Act, even if the posting explicitly excludes Colorado applicants. Similarly, the Illinois and New York state pay transparency laws cover positions that will be physically performed at least in part in the state, or that will be physically performed outside the state when the employee reports to a supervisor, office, or other work site located within the state.
Which states’ pay transparency laws include additional reporting requirements?
California and Massachusetts also impose certain wage reporting requirements for covered employers. In California, a private employer with 100 or more employees and/or workers hired through labor contracts must submit annual pay data reports[1], which require employers to provide pay, demographic, and other workforce data, to the state Civil Rights Department. In Massachusetts, employers with 100 or more Massachusetts employees will have the additional requirement of submitting Equal Employment Opportunity (EEO) pay data annually to the Commonwealth. The first round of EEO reporting for covered employers in Massachusetts is due by February 1.
What are the penalties for failing to comply with pay transparency requirements?
Depending on the jurisdiction, employers may face varying degrees of liability if they fail to comply with pay transparency laws. For example, in Massachusetts, the state attorney general can bring an action against a covered employer for a violation of the law. Incremental fines are imposed for successive violations to further encourage compliance.[2] However, California’s pay transparency act takes this a step further by providing a private right of action for aggrieved parties.
Key Takeaways for Employers
Differences between state pay transparency legislation present complex challenges for multi-state employers. To navigate these complexities and to ensure compliance with national pay transparency standards employers should work closely with counsel to:
Update Policies: Align internal policies with pay transparency laws, including training HR personnel and hiring managers with best practices to ensure compliance with pay transparency for current employees and applicants.
Maintain Records: Keep up-to-date records on all employees to ensure compliance — especially important for remote employees.
Monitor Changes: Stay informed and consult with counsel with respect to legislative changes that could affect compliance obligations.
[1] There are now two distinct types of reports in California: (1) a payroll employee report which covers the employer’s California payroll employees and (2) a labor contractor employee report, covering only labor contractors.
[2] For the first two years after the effective date of July 31, a covered employer in Massachusetts shall have two business days after notice of a violation to cure any defect before a fine is imposed. See Massachusetts’ statute.
Beltway Buzz, January 10, 2025
Welcome to the 119th Congress. Even before President-elect Donald Trump is sworn in on January 20, 2025, change has come to Washington, D.C., as the 119th Congress gaveled in late last week. Here is what the Buzz is watching as the new Congress kicks off:
A Trifecta? Yes, but … Republicans control the White House, as well as the U.S. Senate and U.S. House of Representatives, but that doesn’t mean that getting legislation to President-elect Trump’s desk is going to be easy. In the Senate, Republicans hold a 53–47 majority, with Vice President-elect J.D. Vance as the potential tiebreaking vote. This is seven votes short of a filibuster-proof majority, meaning that most partisan bills will have a hard time getting through the Senate. Moreover, in the House, Republicans hold a 219–215 majority. This razor-thin majority will get even thinner, as President-elect Trump has promised to nominate Representative Elise Stefanik (R-NY) as ambassador to the United Nations and Representative Mike Waltz (R-FL) as national security adviser. Depending on the timing of confirmations and special elections, this could mean that Republicans won’t be able to lose a single vote on any bill.
Get Ready for Reconciliation. Because Republicans are unlikely to sway at least seven Democrats to join them in voting for most bills, they will likely turn to the arcane budgetary process called reconciliation to advance their policy priorities. Ostensibly reserved for budgetary matters, the reconciliation process has the advantage of only needing a majority vote in the U.S. Senate. The drawback of the process is that because it is a budgetary tool, issues contained in such a bill must be fiscally related. Over recent years both Democrats (Affordable Care Act, American Rescue Plan Act, the Inflation Reduction Act) and Republicans (Tax Cuts and Jobs Act) have used the process to secure legislative victories. So, while this process could be used by Republicans to score wins on certain policy positions (e.g., tax cuts), they will not be able to use reconciliation to pass every legislative priority.
“Must-Pass” Legislation. As always, there are annual legislative exercises that must be addressed by Congress. Funding the federal government beyond the current March 14, 2025, deadline and lifting or suspending the debt limit will be major issues that Congress will have to address in the coming weeks and months. This could take time and attention away from other matters, such as the confirmation of political nominees.
Nominations. Speaking of nominations, the Buzz will be watching the confirmation process for putative secretary of labor nominee Lori Chavez-DeRemer. We will also be monitoring vacancies at the National Labor Relations Board and U.S. Equal Employment Opportunity Commission (as well as potential vacancies in the general counsel’s office at each of these agencies). The early rounds of confirmation hearings are usually reserved for high-profile cabinet-level positions such as secretary of state, secretary of the treasury, and attorney general.
Other Legislation. The Buzz will be watching for the reintroduction of the Dismantle DEI Act. The bill is unlikely to pass the Senate, but it could be the subject of congressional hearings.
Ports Strike Averted. This week, the International Longshoremen’s Association (ILA) and the group representing shippers and employers at East Coast and Gulf Coast ports announced a tentative agreement on a new six-year collective bargaining agreement, avoiding a potential strike. Buzz readers may recall that the parties have been negotiating over the introduction of automation technology at the ports. According to a joint statement released by the parties, the “agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coast ports—making them safer and more efficient, and creating the capacity they need to keep our supply chains strong.” ILA members must still vote to ratify the contract.
Fed Contracting Agency Withdraws Salary History and Transparency Rule. On January 8, 2025, the Federal Acquisition Regulatory Council (FAR Council) withdrew its January 30, 2024, proposed rule that would have prohibited federal contractors from considering an applicant or employee’s salary history when making compensation decisions. The proposal also would have required federal contractors to disclose compensation information in advertisements for job openings in connection with a federal contract. The FAR Council stated that “[i]n light of the limited time remaining in the current Administration,” it had “decided to withdraw the proposed policy and rule and focus [its] attention on other priorities, including directives in recent National Defense Authorization Acts.”
OSHA Heat Docket Wraps Up. January 14, 2025, is the deadline for stakeholders to submit comments in response to the Occupational Safety and Health Administration’s proposed heat standard. The incoming Trump administration is unlikely to move forward with the proposal, at least as currently written.
A Commanding Act. During his four years in office, President Biden, the commander in chief, signed into law the American Rescue Plan Act, the Inflation Reduction Act, and the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022, among others. But for residents of Washington, D.C., President Biden’s most enduring legislative victory is probably the D.C. Robert F. Kennedy Memorial Stadium Campus Revitalization Act. The statute instructs the secretary of the interior to transfer “administrative jurisdiction over the Robert F. Kennedy Memorial Stadium Campus” to the District of Columbia for, among other purposes, “[s]tadium purposes, including training facilities, offices, and other structures necessary to support a stadium.” The act likely paves the way for the construction of a stadium in Washington, D.C., that will hold professional football games.
Illinois Warehouse Worker Bill Brings New Challenges for Employers with Quotas
Illinois employers with warehouse worker production quotas should be aware of a bill that has now passed both legislative houses as of Jan. 7, 2025. The Warehouse Worker Protection Act would affect employers with (1) 100 or more employees at a single warehouse in Illinois or (2) 1,000 or more employees across warehouses in Illinois.
The highlights of the bill include:
Employers that use production quotas for warehouse employees must provide those employees with a written description of the quota and any potential adverse action that could result from failure to meet the quota. This written description must be provided within 30 days of the bill’s passage and upon hire for employees hired thereafter. Subsequently, if an employee requests a written description of each applicable quota, it must be provided.
If an employee receives discipline based on failure to meet a quota, the employee is entitled to a written explanation of their failure to meet the quota within three days of an employee request for such an explanation.
Employers will be required to preserve three years of all records regarding warehouse quotas and employee work speed data.
A current or former employee who believes they were disciplined for failure to meet a quota has the right to request: (1) a written description of each applicable quota, (2) the most recent 90 days of their work speed data, and (3) a copy of the aggregated work speed data for similar employees during the same time period.
There is a rebuttable presumption of unlawful retaliation if an employee is subject to an adverse employment action within 90 days of requesting information under the act or making a complaint under the act.
The Illinois Department of Labor may seek monetary damages and civil penalties. Additionally, there is a private right of action to seek injunctive relief. Although monetary damages cannot result from an employee’s private action, the employee can recover attorney’s fees and costs if they prevail.
While the act has not yet been signed into law, Illinois employers that use production quotas should consider preparing for compliance, including drafting written descriptions of applicable quotas and penalties for failure to meet quotas and completing data preservation of all quotas and employee work speed data.
Pumping the Brakes? Outlook for State and Federal Vehicle, Engine, and Equipment Emissions Standards
With the start of the second Trump administration just over a week away, there are many uncertainties with respect to how the new administration will regulate vehicle, engine, and equipment emissions, and the steps the second Trump administration may take to roll back emission standards set during the Biden administration. However, one thing is certain, there will be changes; and those changes are likely to impact how industry develops new mobile source products, meets emission standards, invests in new technologies, and considers any federal rollbacks of the mobile source obligations set by California and adopted by other states that implement California’s mobile source rules.
Many have speculated that the new administration will take aim at the U.S. Environmental Protection Agency’s (EPA’s) emission standards issued for model year 2027 and later light- and medium-duty vehicles and the new greenhouse gas emission standards set for heavy-duty highway vehicles finalized by the Biden administration in the spring of 2024. Whether there will be a full-scale rollback of those standards or more measured changes is unclear. However, any changes to the federal standards would require a new EPA rulemaking which could take a year or more to accomplish, leaving regulated industry facing uncertainty going into 2026 with respect to the specific standards that will apply for the 2027 model year.
Perhaps more clear is that the change in administration will almost certainly effect at least some of California’s mobile source rules. Under Section 209 of the Clean Air Act, states are preempted from adopting or enforcing emissions standards for new vehicles and engines. However, Section 209 of the Clean Air Act allows California to request that the EPA waive this preemption so that California can enforce more stringent standards in the state. Under Section 209 of the Clean Air Act, unless the EPA finds certain limited grounds for denial it must grant California’s waiver request. Section 177 of the Clean Air Act also allows other states to adopt California’s mobile source standards.
While EPA has never denied a waiver request from California, in the first Trump administration, EPA withdrew California’s waiver for its Advanced Clean Cars I rule. That waiver was subsequently reinstated by the Biden administration, followed by a deluge of litigation related to EPA’s overall waiver authority since then. For example, on December 16, 2024, the Supreme Court denied certiorari in the State of Ohio et al. v. EPA where the joining states argued that the Clean Air Act’s preemption waiver provision violated “equal sovereignty”. While the Supreme Court declined to take on the constitutionality of EPA’s waiver authority in that case, similar challenges may be raised in the future, given that EPA has recently approved a number of new waiver requests and is set to approve the remaining outstanding waiver requests in the coming days.
Regardless of the waiver-related litigation, the Trump administration is likely to withdraw at least some of the EPA’s recently approved waiver requests, which would remove California’s and the states proceeding under the authority of Section 177 to enforce rules covered by the waiver once the waiver is withdrawn.
Currently, there are two California rules awaiting EPA waiver approval or authorization:
In-Use Locomotive regulation
Advanced Clean Fleets regulation
The Trump administration is expected to deny any waivers that remain pending after taking office, which would make those rules unenforceable in California and in the other states that have adopted the California rules. In particular, the Advanced Clean Fleets regulation faces ongoing litigation and industry pushback, which will be difficult for California to overcome if that waiver is denied.
EPA has also recently approved waivers for six additional California rules:
Advanced Clean Cars II regulations
Heavy-Duty Omnibus Low NOx regulations
Small Off-Road Engines (SORE) Amendments
Commercial Harbor Craft Amendments
Transport Refrigeration Unit (TRU) Amendments
In-Use Off-Road Diesel-Fueled Fleet Amendments
How the Trump administration will address these recently issued waiver approvals is less certain. If the first Trump term is any indication, it is likely that all or some of these recently issued waivers will be withdrawn, triggering protracted litigation and industry uncertainty. During Trump’s first term, following the withdrawal of the Advanced Clean Cars I rule waiver, the California Air Resources Board (CARB) entered into voluntary agreements with certain auto manufacturers that imposed alternative greenhouse gas standards as a stopgap while the waiver withdrawal was litigated and to help provide some regulatory certainty for automakers while the state of the regulations was in flux. CARB also indicated that it would retroactively enforce the Advanced Clean Cars I rule if the waiver was later reinstated. This could serve as a playbook for CARB during Trump’s second term if a number of the above waivers are denied or withdrawn. For example, with respect to the Heavy-Duty Omnibus Low NOx regulations, CARB previously entered an agreement with certain manufacturers that sets alternative standards for those parties in an effort to achieve regulatory certainty and stave off protracted challenges. Under that agreement, manufacturers also agreed not to challenge certain CARB regulations including the Advanced Clean Trucks regulation.
While uncertainty remains with respect to how the new administration will address vehicle, engine, and equipment emission standards and requirements, there will be changes that may require regulated industry to adjust current compliance, production, and investment plans, particularly with respect to electric and other zero-emission technologies, related infrastructure, and supply chain arrangements.