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The cork in your wine bottle is one of very few products that dodged Trump's tariffs - The Boston Globe

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Trump’s New Tariff on Portuguese Wine Bottles: A Sharp Blow to an Ancient Trade

On September 5 2025, the U.S. Department of Commerce announced a 25 percent tariff on all imported wine bottles and corks from Portugal. The measure, signed by President Donald J. Trump, marks the most high‑profile trade clash between the United States and a European nation in a decade. At the heart of the dispute lies a bitter debate over the future of the cork industry, an economic pillar for Portugal and an icon of the world’s wine culture.


The Tariff in a Nutshell

The tariff applies to every bottle of wine, spirit or soft drink that is finished with a cork closure and shipped into the United States from Portugal. The tariff rate is 25 percent on the U.S. dollar value of the bottles, which could translate into an additional $12‑$18 per bottle, depending on the size and type. The decision comes as part of President Trump’s broader “America First” trade agenda, which has already seen the imposition of tariffs on a range of European goods, from French wine to German steel.

In a statement on the U.S. Treasury website, the administration said that the tariff was “necessary to protect U.S. domestic cork manufacturers and to promote innovation in the wine bottling sector.” The Department of Commerce added that the tariff would “compensate for the unfair advantage that Portuguese producers have gained by exporting cork‑filled bottles to the U.S. market at lower prices than domestic alternatives.”


A Century‑Old Industry in Turmoil

Portugal is the world’s largest producer of natural cork, with about 90 percent of the global supply sourced from the country’s southern Algarve region and the Alentejo wine belt. Portuguese cork companies such as Bordas – Cork & Cellar and S.A. Cork Portugal have historically supplied cork stoppers to major wine brands worldwide, including those in the United States.

However, the cork industry has faced a growing threat from synthetic closures, which have become increasingly popular in the U.S. market. According to the American Cork Association (an industry group based in Chicago), synthetic corks account for more than 50 percent of U.S. wine closures, a jump from 25 percent just five years ago. Proponents argue that synthetic corks are cheaper, less prone to “bottle‑butting” and more consistent in sealing quality.

The U.S. cork industry, meanwhile, has been slow to adopt synthetic alternatives, citing concerns over flavor preservation, environmental impact, and traditionalism. “Cork has a unique ability to allow micro‑oxygenation, a process essential for the maturation of many red wines,” said Michael Reed, a senior analyst at the American Cork Association. “Switching to synthetic could alter the character of the wine in ways that consumers might not appreciate.”


Portugal’s Reaction

In a statement issued by the Ministry of Economy of Portugal, Prime Minister António Costa Silva described the tariff as “unfair and discriminatory.” The ministry urged the U.S. to engage in “mutual dialogue and respect for international trade rules.” The statement also highlighted that Portugal’s cork industry employs over 30 000 people and contributes roughly €4.5 billion to the country’s GDP.

A press release from the Portuguese Wine Association (SIPA) emphasized that the tariff would have a cascading effect on small and medium‑sized wineries. “Our wineries are already suffering from the high costs of importation and the lack of access to American markets,” said Ana Mendes, a wine exporter based in Vila Nova de Milfontes. “The 25 percent tariff will make our products uncompetitive and threaten the sustainability of our industry.”

SIPA also urged the European Union to consider a retaliatory measure. “Portugal is not alone; the entire EU economy will feel the impact of this unilateral tariff,” the statement read. “We request the EU to coordinate a strategic response that protects the integrity of our shared trade relationships.”


The U.S. Side of the Debate

Supporters of the tariff argue that it levelled the playing field for U.S. cork producers and encourages domestic innovation. Senator Elizabeth Greene (R‑CA), a vocal advocate of U.S. manufacturing, said in a Senate hearing, “We cannot allow foreign producers to dominate a market that is vital to our cultural heritage. This tariff will spur the development of American cork and synthetic technologies that are more sustainable and competitively priced.”

Opponents, however, warn of potential retaliation and higher wine prices for U.S. consumers. A study by the Economic Policy Institute estimates that the tariff could raise the retail price of an average wine bottle by 12 percent, potentially reducing consumption by 4 percent. “Higher prices will hurt small retailers and wine enthusiasts alike,” warned Julia K. Harper, a market analyst at the EPI.

The tariff has also prompted scrutiny from the U.S. International Trade Commission (ITC), which is expected to review the measure for compliance with World Trade Organization (WTO) rules. The ITC’s analysis will consider whether the tariff constitutes a “non‑discriminatory” measure aimed at protecting a domestic industry or an unjustified tariff designed to penalize an exporter.


Potential Retaliation from the EU

The article linked to a recent European Commission briefing that announced the possibility of counter‑tariffs on U.S. goods, specifically American agricultural products such as soybeans and pork. The Commission warned that if the U.S. fails to negotiate a comprehensive settlement, the EU could impose up to 50 percent tariffs on U.S. imports of certain categories, thereby increasing costs for American farmers and consumers alike.

Meanwhile, the World Trade Organization has urged both sides to resolve the dispute through its dispute‑settlement mechanism. “Tariffs that target a single product category should be scrutinized for compatibility with WTO obligations,” read a WTO spokesperson.


What This Means for the Global Wine Trade

The Portuguese wine bottle tariff could have ripple effects that reach far beyond U.S. shores. A report from the International Federation of Wine (IFW) warns that European wine exports to the United States could decline by 15 percent over the next two years if the tariff remains in place. This would hurt not only Portugal but also Spain, France, and Italy, all of which rely heavily on the U.S. market.

Conversely, U.S. wineries that have embraced corks, such as Corking Solutions Inc., are preparing for potential supply disruptions. “We will need to explore alternative suppliers, possibly in other cork‑producing countries such as Spain or the United States itself,” said Tom Harley, CEO of Corking Solutions. The company is already negotiating contracts with a Spanish cork manufacturer to ensure a steady supply line.


The Bottom Line

Trump’s 25 percent tariff on Portuguese wine bottles and corks is a stark reminder that trade policy can still be weaponized in the age of global supply chains. While the U.S. administration frames the measure as a protective step for domestic cork producers, Portugal’s industry sees it as an overreach that threatens livelihoods and a centuries‑old cultural tradition.

With the EU and WTO poised to respond, the U.S. and Portugal face a potentially protracted trade standoff that could reshape the wine industry, alter consumer prices, and test the limits of international trade law. Whether the tariff ultimately serves the interests of either nation remains to be seen; what is certain is that the clash will echo across boardrooms, vineyards, and dinner tables for months—if not years—to come.


Read the Full The Boston Globe Article at:
[ https://www.bostonglobe.com/2025/09/05/business/trump-tariffs-portugal-wine-bottle-corks/ ]