I travel the world. A lot.
For example, I was in Chile when Donald Trump was elected as the 45th President of the United States of America (and yes, I voted by mail before I’d left for the trip).
Since Trump’s election, I’ve traveled to other countries, all for wine-biz-related stuff, and the same question keeps being asked to me by well-meaning but concerned members of the wine biz. The same two questions, actually.
- How the f*ck did that just happen?!??
- What do you think Trump’s presidency means for the wine business?
I’m not only unequipped to answer the first question, I don’t think that, if I were, I’d have a decent, coherent explanation anyway (see the attempts by everyone else).
Regarding answering the second, I’ve got some good news/bad news for you. This is what I’ve been answering to everyone posing that second question to date:
Probably not much.
Since that seems a little (too) brief, I feel compelled to go into the details. But trust me, they won’t get us much further along the path to a viable answer…
Here’s the thing about Trump’s rhetoric, and, to some extent, his policies: they are disconcertingly malleable. That means that his presidency will be, at least somewhat and certainly more than any other presidency in modern times, unpredictable.
We have important clues from Trump’s behavior during November 2016, after election day, however, that I think bolster the notion that very little will actually change in terms of the impacts on the wine business in the U.S. (and the country’s place as the world’s largest wine consumer).
The shorthand version of all of the news coverage of his actions in that time frame – actually, in all of 2016 – is that Trump is all blustery talk, and probably not much blustery action. To wit:
- Trump promised to build a wall along the U.S.-Mexican border, and get Mexico to fund it. He visited the country and spoke with its president, and by most reliable accounts did not substantially discuss what should have been the major topic between them.
- Trump promised to “drain the swamp” of traditional, corporate interests in the U.S. government, and to date has largely filled his advisory positions with people who have ties to large corporations, are long-time government insiders, and/or have committed the same or similar discrepancies of which he accused his election opponent, Hillary Clinton, of having committed.
- Trump promised to repeal the Affordable Care Act, the progressive U.S. healthcare insurance legislation (a topic that, believe me, is as equally difficult to explain to the residents of other countries as the electoral college). After meeting with President Obama once, Trump was quoted as saying that the key provisions of the ACA were solid enough to likely prevent its repeal.
He does not appear to be an agent of change in the areas where it counts most: his actions.
Trump is no different than any other politician. He is absolutely as full of bullsh*t and fake promises as any other person who has ever run for political office anywhere else.
That’s why I do not expect any massive changes for the U.S. wine business during a Trump presidency. Actually, I wouldn’t expect them with any President, given how slowly their agendas are able to progress through the U.S. Congress. And yes, I mean that, despite Trump’s bluster on immigration (would you want to be the Congress that is remembered as the one that destroyed the U.S. produce business because of your hard-line immigration stance?); despite his rhetoric on making things easier for businesses (if anything, that will be a negative impact for the environment, not an open invite for mass consolidation, because who in Congress would want to be remembered as part of the group that squashed small business progress, including smaller import and distribution and sales companies?).
When you combine Trump’s mostly-talk stances with Congress’ terrible approval ratings, you don’t have a recipe for sweeping, massive changes.
Now, we could legitimately debate the impacts of a Trump presidency on many other aspects of our lives, but I’m not going to do that here. When it comes strictly to the wine biz, I think that the seat belt lights have been illuminated, and we need to sit down and buckle up for a bumpy ride; but the pilot isn’t radioing in mayday, and the oxygen masks aren’t dropping from the ceiling just yet, folks.
13 thoughts on “What A Trump Presidency Means For The Wine Business”
great article! Couldn’t agree more :) what about his winery in VA?
Thanks, David. In terms of Trump’s VA winery, I don’t think that he has any day to day dealings with it, and I would suspect that there would be little change. Having said that, I also suppose it would be in their best interests to fully disengage with Trump from a business standpoint during his presidency; but Trump has shown little indication that he will create a proper firewall between himself and his businesses.
There are three areas where we could see effects:
1) TTB staffing is already low, and waits for label approvals take a long time. This could get worse if he plans to make cuts to the federal workforce. At the same time, he could ask TTB to speed up approvals of new AVAs, which would mean even slower label approvals.
2) Exchange rate — if he makes wild pronouncements, things could fluctuate in the short term, but if you can’t wait to make that payment, you could get screwed.
3) Tariffs are another wild card. We don’t yet import wine from China, but can you imagine if he gets into a tweetstorm against some world leader? Even if he couldn’t follow through on raising tariffs it could still affect exchange rates.
I too was away for the elections, and was with a bunch of importers from Central and South America. They told me that they expect their own countries to elect crazy people, but that despite their differences, they’ve always looked up to the U.S. for its stability, especially through elections. Guess that’s over now.
I think for #1, we could have hit that under a HRC presidency as well. Regarding exchange rates, I think there is a real concern there, though unfortunately an unpredictable one.
I got similar concerns and thoughts abroad as well. In Italy they took it less hard, having lived through their own version of this already :).
This is a bit like “What a 20 mile wide asteroid strike means for the wine business.” Sure, it will kill off mankind, but it’s specific impact on the wine industry will actually be quite minimal. Let’s look into this in more detail…. ;-)
Michael, I think that’s a bit of an overkill of a comparison, though a humorous one :).
I’ve received some social media comments that under Trump, US citizens will have more expendable income with which they could buy more wine. This is related to the proposed changes in his tax policies.
I would challenge that notion on two grounds:
1) The USA is already the #1 wine market, and it’s not at all clear that more disposable income will translate into increased wine sales.
2) Trump’s tax plan does not benefit the income brackets and demographics most likely to spend their disposable income on wine: see http://www.investopedia.com/articles/taxes/111716/trumps-uppermiddleclass-tax-increase.asp for an analysis of that.
My WINE WALK Article on the same subject had several predictions which I believe will happen. First, mechanical grape harvesting will be way harvesting will happen in the future. Mechanical harvesters will adapt to steep hillsides. Second, a farm worker immigration policy will be implemented to provide some farm labor. However, California will see farm labor shifting to the marijuania farms. Third, government regualtions such as monthly reporting will be changed to quarterly submissions. Fourth, additional government regulations will be lessened.
Thanks, Ron, got a link?
Regarding this: “California will see farm labor shifting to the marijuania farms.” – we are seeing that now, I don’t think that has any connection to a DJT presidency?
1WineDude, thanks for the article! As a producer in the Finger Lakes I’m sure that I am every bit as interested as the next reader about the impact that a president elect has to affect the industry. You, and some of your commenters have echoed a few of those concerns and I’m sure that there are many more points of interest to consider beyond the impact of availability of migrant workers in the vineyards (which we’re finding even harder to come by with winter pruning about to begin), the impact of TTB regulations and the efficiencies of that department, or the spending power/”disposable income” of working families impacting the premium wine market.
I’ll be paying more attention to some other concerns as well as we work our way into a Trump presidency. Withdrawal from the Trans Pacific Partnership would affect much larger producers in California than any of us in the Northeast, but if you take China, Hong Kong and Japan together they’re a larger importer of American wines than any other group than Great Britain. NAFTA is another one of those trade agreements that could be a concern with labor coming from Mexicao and large exports going to Canada. Canceling restrictions on environmental policies, while impacting all of us, could have a really profound effect on farming in general, and wine growing specifically. Especially here locally, where many of our vineyard owners aren’t to keen on the idea of shale exploration for natural gas, and how it could take away some of the majestic beauty of our region while potentially harming our soils. Immigration reforms will always impact farm labor, but it seems as though in this administration there shouldn’t be a concern for rising labor rates to meet $15 minimum wage standards that could impact both production and retail by keeping production costs in check.
These are just some things I’ve been thinking about, and I am NO WAY either endorsing or protesting the incoming administration. I’m just merely thinking out loud, and I assume that there will be positive impact to get excited about too. We’re in for another two years (at least) where two houses of government will more speedily enact like-minded legislation. Here’s to hoping that the decision making is made with level heads!
Thanks, BZug. For the record, I *am* speaking out against the incoming administration, particularly the advisory and cabinet picks, for all of the concerns that you mentioned. Having said that, those concerns represent a kind of worst-case scenario, would require more help from Congress to enact than DJT’s administration is likely to get, and are sure to be met with massive opposition, especially in the court system (and would take years to come to pass even if they didn’t get challenged, which they will).
Dammit, man. Don’t hold back. Tell us what you REALLY think!
I think DJT is all hot air, bro.
Comments are closed.