PORTLAND, Ore. (KOIN) — Andrew Fortgang — the co-owner of Portland restaurants Le Pigeon and Canard — is speaking out against potential wine tariffs being imposed by President-elect Donald Trump — saying the move would be a “punch in the gut” for his businesses.

“About two-thirds of what we sell is food and about one-third is beverage, usually alcohol, and a good amount of that is wine,” Fortgang said.

“Over the last few years, margins have been even tighter for everybody — you know, inflation and whatnot — but for restaurants too, and we really need that revenue that comes from wine to cover all the costs to take care of our teams. The concerns are that if those tariffs on wine come into place, that puts a real squeeze on a really important part of what makes restaurants viable,” Fortgang said.

Days before his second term, President-elect Donald Trump’s tariff plans are not clear; however, his team is considering a “universal” tariff against all countries on certain imported goods, as reported by The Washington Post — noting as a candidate, Trump called for tariffs as high as 20%.

In 2019, the U.S. imposed a 25% tariff on most still wines with 14% or less alcohol content, from France, Germany, Spain, and the United Kingdom. The tariffs were in response to illegal subsidies the European Union made to plane manufacturer Airbus. Meanwhile, the U.S. was accused of giving illegal subsidies to Boeing.

Those tariffs were later expanded to include wine with 14% or more alcohol content in 2020 before the tariffs were suspended in 2021.

While Trump’s tariff plans going into his second term are unclear, Fortgang says businesses like his own face a few choices if tariffs are re-introduced on imported wine.

The first option is for businesses to accept the increased cost of imported wine and to choose not to raise restaurant prices, which would burden the businesses’ budgets.

The second option would be to raise prices to make up for the increased costs of imported wine.

“The problem with that, of course, is there’s a limit to how much we can expect our guests to pay, or how much they’re willing to pay when they look at the cost of a bottle of Chianti, or wherever it’s coming from somewhere in the world, they might not be thinking ‘Hey, there’s a tariff that got put on this,’” Fortgang said. “(Customers) just see that it’s a little bit more than they think it should be, and they might forego that bottle for just a glass, or that second glass if they were thinking of having it. And when that happens, it makes a real deep impact on the restaurants.”

Fortgang said he does not buy wine for his restaurants directly from wineries. Instead, the wine comes from a distributor, who buys the wine from an authorized American importer, noting the tariffs would be placed on the company that’s importing the wine.

For Fortgang’s businesses, imported wine is crucial to the dining experience, he said.

“For us, we’re based in French cuisine, or Italian, or Spanish. When people come into our restaurants, it’s about having the whole experience, having the beverage that goes with the food. Wine is not like vodka or soda; it’s not Coke or Pepsi or I’m an Absolut drinker versus a Kettle One drinker. And guests, when they go out to dine, if they’re having pasta, they want that bottle of Chianti or Vermentino. It’s nothing against American wines, it’s just that’s part of the experience,” Fortgang said.

“And (customers are) more likely to forego having that wine at all and then switch to a different kind of wine. And so that’s why it’s so critical. Because when that happens, when the wines that we have to sell – either we have to price them too high for our guests or we don’t, and it doesn’t really make financial sense to even sell them because we can’t earn enough money from them,” he added.

Around 2020, Fortgang became one of the founding members of the United States Wine Trade Alliance, an organization representing various tiers of the wine industry that’s advocating for zero tariffs on wine.

Fortgang said he worked with Oregon lawmakers, including former Oregon Rep. Earl Blumenauer, and Senators Ron Wyden and Jeff Merkley to learn how the organization can make their voices heard in Washington D.C. According to Fortgang, the lawmakers were “absolutely” supportive of their efforts to stop the tariffs.

Orley Ashenfelter — president of the American Association of Wine Economists and a Princeton University economics professor — told KOIN 6 News that new tariffs could have varying impacts on the U.S. economy whether they’re targeted towards certain goods or specific countries.

“I do think tariffs would affect prices, but the thing about them is (they have) a very uneven effect. They’re uneven because if you have substitutes, you can easily use the substitute rather than the item that’s getting the tariff put on it,” Ashenfelter said.

“Restaurant owners who refuse to buy local goods…wouldn’t be so happy, because their customers would have to either switch the kind of product they consume, or alternatively, pay a higher price,” he furthered.

“Economists, as a generally large group, have a hard time justifying tariffs most of the time. We think that’s harmful to the buyer, as well as to the seller. The Donald Trump use of tariffs is a little unusual in that it’s often political. It’s not really based on real economics,” Ashenfelter said.

“In the history of the United States, tariffs were very common early on because they were a form of revenue – a tariff is a tax, so you collect money on goods that are brought into the U.S. – and collecting money on goods that are brought into American ports was a lot easier than trying to collect money directly,” Ashenfelter said. “So, the history of them for raising income isn’t an ancient one, but it doesn’t make much sense for us because we have far better ways, far more efficient ways to collect tax.”

“I think it’s often these are tit-for-tat arrangements where one country feels obliged to do something about another because they feel like they’ve been engaged in some behavior they don’t like,” Ashenfelter added. “I think occasionally, there can be reasons why it would be sensible to have tariffs for economic reasons but doing it for political reasons is just a poor way to run a government.”

If tariffs on imported wine are imposed, the economist says domestic wine producers could benefit, especially in large wine-producing states such as Oregon, noting, “It would be a good excuse for the Oregon wine producers to launch a ‘drink local, avoid these tariffs’ (campaign.)”

Ashenfelter added that local wine producers could also use wine tariffs as an opportunity to increase their prices if they see growth in demand.