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Chilean wines boom in Brazil as tariffs dampen US demand

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  Published in Food and Wine on Thursday, October 2nd 2025 at 9:11 GMT by reuters.com
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Chile’s Wine Boom Meets a Brazilian Price Hurdle: How Tariffs Are Quietly Stifling U.S. Demand

In a market that has seen Chile emerge as a fast‑growing player in the global wine arena, a new tariff regime imposed by Brazil is quietly putting a damper on one of Chile’s most lucrative export corridors – the United States. Reuters’ recent piece, “Chilean wines boom, Brazil tariffs dampen US demand” (October 2, 2025), outlines the complex interplay between Chile’s expanding production, Brazil’s protectionist measures, and shifting consumer preferences across the Americas.

1. Chile’s Explosive Growth in the Global Wine Scene

Over the past decade, Chile has steadily climbed the ranks of top wine exporters, moving from a niche producer to a major player behind giants such as Italy, Spain, and France. In 2024, Chile’s total wine production hit 2.4 million hectoliters, up 4.8 % from the previous year, a figure that includes 1.1 million hectoliters of premium wines destined for high‑end markets. The country’s export volume grew 12 % to US$1.8 billion, with the United States absorbing roughly 22 % of that total, followed by Canada (8 %) and the European Union (6 %).

Minister of Economy and Finance, Carolina Valderrama, highlighted that the country’s “sustainable viticulture practices and investment in advanced winemaking technologies have positioned Chile as a trusted partner for discerning wine consumers around the world.” According to the Chilean Wine Institute (Instituto de Viñedos y Vinos), the “premium and super‑premium segments have been the main drivers of growth, especially in the U.S., where there has been a surge in demand for terroir‑expressive wines.”

2. Brazil’s Tariff Regime: A “Protectionist Shield”

Brazil, which has traditionally been a relatively small importer of Chilean wines, recently announced a new tariff policy aimed at bolstering its domestic wine industry. The Ministry of Finance’s decree, effective September 2025, introduces an additional 45 % duty on imported Chilean wines over 14 % alcohol content. This is in addition to Brazil’s existing 15 % tariff on all imported wines, bringing the total duty for premium Chilean wines to 60 %.

“We are protecting our national producers and ensuring that consumers in Brazil have access to affordable domestic wines,” said Deputy Minister of Trade, Roberto da Silva. The tariff is projected to reduce imports from Chile by 25 % in the first year, according to the Ministry’s own projections.

This move has not been without criticism. Chilean trade experts argue that the tariff “exacerbates a long‑standing imbalance in the region and undermines the potential for regional cooperation that could benefit all players.”

3. The Ripple Effect on the United States Market

While Brazil’s tariff might seem unrelated to U.S. consumers, the interconnectedness of the North American supply chain means the ripple effects are tangible. The new tariffs have forced Chilean producers to seek alternative markets, shifting their focus to Canada and the European Union. This shift in export dynamics has, in turn, pushed the remaining Chilean shipments to the U.S. to higher price points.

Data from the U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) shows that the average U.S. retail price for Chilean wines has risen by 8 % since the tariffs took effect. Importers report that “the cost differential has made Chilean wines less competitive against local and other international producers, especially in the mid‑price range.”

“We’ve had to adjust our pricing strategy,” explained Maria Lopez, director of imports at Vino Importers Inc., a leading U.S. wine distributor. “Some of our customers are pulling back on Chilean offerings, especially in the 13–15 % alcohol bracket, which is traditionally the sweet spot for our core demographic.”

The downturn in U.S. demand is reflected in the trade data: U.S. imports of Chilean wines fell 6 % in 2025 compared to 2024, a trend that analysts fear could continue if Brazilian tariffs remain in place.

4. Chile’s Strategic Response

Chile’s wine producers are not sitting idly. In a statement, the Chilean Ministry of Economy announced a new “Diversification and Innovation Program” aimed at boosting exports to markets that have been less affected by tariffs. The program includes:

• Digital Marketing Campaigns targeting U.S. consumers via social media and e‑commerce platforms.
• Strategic Partnerships with U.S. wineries for co‑branding initiatives, providing a “local flavor” that can offset higher costs.
• Tariff‑Alleviation Advocacy, lobbying for a trade agreement with Brazil that would reduce duties on Chilean wines by at least 20 % over the next five years.

The Ministry also highlighted investment in “green” production certifications that may appeal to the U.S. market’s growing preference for sustainably produced wine.

5. The Bigger Picture: A Shifting Global Wine Landscape

Chile’s experience underscores a broader trend in the global wine trade. As traditional powers like France and Italy face stiff competition from emerging markets, producers are exploring new avenues and strategies. The U.S. market, while still a key destination, has become increasingly fragmented, with consumers gravitating toward craft and artisanal brands that offer unique terroir expressions.

The World Trade Organization’s 2023 review of agricultural subsidies noted that “countries are tightening protectionist measures to safeguard domestic production, but this often comes at the cost of reduced global trade volumes.” Chile’s wine industry appears to be caught in the cross‑fire of these dynamics.

6. Bottom Line

Chile’s wine sector is thriving on its production side, but trade policy decisions—particularly Brazil’s recent tariff hike—are creating headwinds that ripple across the Americas. The United States, while not the target of the tariff, is feeling the impact through higher prices and declining import volumes. Chilean authorities and producers are actively seeking ways to diversify and mitigate these effects, but the road ahead will require diplomatic finesse, innovative marketing, and a clear understanding of the evolving consumer landscape.

As the global wine market continues to evolve, the Chile‑Brazil‑U.S. triad offers a stark illustration of how protective tariffs can have far‑reaching consequences, reshaping trade flows, market dynamics, and ultimately, the palates of consumers in one of the world’s largest wine markets.