These days, the subject of Donald Trump’s tariffs finds its way into just about any conversation about politics, the economy and life in general. These additional taxes on most items brought into the United States from other countries have caused a consumer panic, and those feelings of anxiety and uneasiness extend to the bar and restaurant business.

Bar owners, beverage directors and spirits distributors must now grapple with what these tariffs mean for their business costs and their bottom lines.

Raj Bhakta, founder of Bhakta Spirits and WhistlePig Whiskey, is actually a supporter of Trump’s tariffs, and he thinks these policies may be worth the risk: “We find ourselves in a moment of potential short-term pain for guaranteed long-term gain. This passing economic pinch will be a small price to pay for the American prosperity to come. I say all of this as a business owner willing to take the short-term hit now, personally, for the greater long-term good.”

But the vast majority of beverage industry folks we interviewed don’t have high hopes for these tariffs reaping any long-term benefits for their own businesses, or for the American public at large.

“We learned the lesson 100 years ago about tariffs, and it is deeply frustrating to revisit a topic that has been resoundingly denounced,” said Kristin Evans, general manager of Red Tail Ridge Winery in Penn Yan, New York. Evans allows that “tariffs can be a part of an effective economic policy, but tariffs in and of themselves are not economic policy. They’re just one piece of the puzzle.”

So what exactly will these tariffs do to the beverage industry, to foreign and domestic producers, and to your bar tab? Read on to find out.

Because the tariffs directly apply to products from other countries, it’s no surprise that they will cause higher retail and bar prices for imported wines, beers and spirits. In 2022, 14% of all agricultural imports in the U.S. were from wine, spirits and beer, and 17% of the wine consumed in the U.S. comes from the European Union. The National Beer Wholesalers Association says that 21% of beer sold in the U.S. in 2023 was imported.

“The tariffs will make every sip more expensive. If importers have to pay more, then they will charge more,” said Kyle Davidson, wine and beverage director at Rose Mary and il Carciofo in Chicago.

The fast rate of the tariff implementations has wreaked immediate havoc on businesses that rely on imports, causing them to reevaluate their needs and make some drastic changes. “One of our best friends in the industry, someone that has given us great wines at great prices for years, had to tell two ships that were in the water to turn around. If they had landed while the tariff was at the proposed percentage, it would have put him out of business,” Davidson explained.

Restaurants and bars that focus their concepts on international cuisines may find it difficult or impossible to pivot their beverage menu to domestic wines. Georgia Harrison, the logistics manager at Zev Rovine Selections, a natural wine importer and distributor based in Brooklyn, put it this way: “The [restaurant] industry relies on beverage sales to keep things afloat.” These tariffs could put your favorite Italian, Spanish and Greek restaurants at serious risk of closure.

Also, the higher prices on imports may hamper bartender creativity when it comes to designing new cocktails. “Tariffs on imported spirits don’t just raise prices — they restrict access to the global ingredients that define modern American cocktail culture. For example, if the Oaxacan mezcal we use becomes significantly more expensive or harder to source, that doesn’t just affect bar costs — it limits creative expression for bartenders and founders like myself who rely on those flavors to innovate,” said Robert Haynes, cofounder of Hoste Cocktails and Apologue Liqueurs.

It’s easy to assume that, if prices go up on imported wines, spirits and beers, domestic producers will benefit from higher demand. But even if a wine, beer or spirit is made in the United States, many of the materials required for production, bottling and packaging come in from overseas. “Increased tariffs on imported grains, hops and aluminum will drive up production costs for breweries, forcing them to raise beer prices, reduce profit margins or compromise on ingredient and packaging quality, ultimately affecting consumer affordability and the variety of craft beer available,” said Courtney White, owner of Intermission Beer Company in Richmond, Virginia.

For wineries, “packing materials, bottles, corks, oak barrels and bottling equipment are often imported for domestic wine production,” said Ted Rink, beverage director at BLVD Steakhouse in Chicago.

Louis Kernans, director of operations at JW Marriott Dallas Arts District, added that “bottles, corks and cartons can account for nearly a third of a small winery’s budget, so tariffs on imported glass or natural cork squeeze margins and make distributors more cautious with niche domestic labels.”

Speaking of distributors, it’s important to recognize the role that these third-party groups play in the beverage industry and how tariffs on foreign products will fundamentally change the way that they do business. “In the United States, you have to use a third-party distribution company to get your product out into the marketplace. That’s how it’s set up,” Evans said.

While it’s not generally required for wineries and distilleries to sell their products to restaurants and shops through a distributor, the three-tiered system (producer, distributor and retailer) that Evans described accounts for the vast majority of alcohol that you see on the market nowadays. Distributors make it easy for restaurants and bars to identify and acquire wines and spirits that fit their concept and price point, and they also help smaller producers raise their sales and visibility.

But, as Evans explained to us, “most distributors do not just focus on American wine [and spirits]. They have a book that contains wines from America, wines from South America, wines from Australia, wines from Europe and so on.” If a distributor has to deal with foreign tariffs “on three-quarters of the products that they’re selling, they’re going to truncate the product lines they’re representing, and they’re only going to go with the products that are guaranteed best-sellers.” So instead of pushing wines and spirits made by artisanal producers making specialty bottles with great care and precision, distributors will put more energy and effort into promoting “big wineries like Mondavi and E&J Gallo.”

Tariffs will make it more expensive for distributors to get foreign wines and spirits into the U.S., but that doesn’t just mean that they’ll increase retail prices for those particular bottles. “[Distributors] can raise the prices of the items that they’re getting tariffed on, but if [those] account for three-quarters of your products, then the easier route for the business would be to raise the prices across the entire spectrum of products that you provide,” Evans said. Dividing the increases among all of their items (both foreign and domestic) will allow the distributors to offer lower price rises on each individual wine/spirit, but you’ll be paying more all the same.

Harrison explained that wine and spirit prices have already been experiencing an upswing: “Between rising costs from wineries and shipping costs driving sharply upward, we have been seeing retail costs climb steadily since 2020. No import company can absorb the additional 10% tariff — they will pass it along to their retail customers, who will pass it on to the consumer.” Harrison also told us that these pricing changes will impact a certain segment of the market in particular: “Drinkers who stay within the $25-and-under range that are going to find their selections get smaller and potentially lower in quality, especially in the under-$20 zone. Wine already has a reputation for having a high barrier to entry, and I think we are going to see retail sales decline as people get priced out of their go-to bottles.”

But what if you want to cut out the middleman, buy craft booze directly from a distiller, brewer or winemaker, and have it delivered to your house or to your restaurant? Théron Regnier, distiller and CEO at The Obscure in Los Angeles, pointed out that this idea isn’t nearly as simple as it sounds. “Interstate shipping is still restricted for craft distillers,” with rules varying wildly from state to state, so “consumer choices are about to become scarce or expensive unless we see regulatory changes.”

Trump’s tariffs themselves have caused substantial anxiety throughout the beverage industry because of higher prices and reduced availability … but arguably the most frightening thing about these tariffs is their unpredictability. One day they’re on, the next they’re delayed, there are exceptions, there are exceptions to the exceptions — all of this volatility makes it nearly impossible for businesses of any kind (including hospitality businesses) to properly plan ahead.

“As we have all seen, tariffs have been forewarned, implemented and then retracted,” said Kisong Mun, sommelier at The Dearborn in Chicago. Mun added that it may take some time for the impact of tariffs to fully register with consumers, “I think consumers might have a month or two before we start seeing big increases in pricing as inventory dwindles and the need to replace [it] becomes more pressing.”

Even under the best of circumstances, overseas wine and spirits orders must be placed well in advance. “If you’re an importer and you’re placing an order to Europe for wine, it has to get through the customs process on the port-of-exit side and it has to cross the ocean. So that’s a month, two months? And oftentimes with wine, you’re placing your orders a year in advance, especially when you’re talking about fine wine like Bordeaux and Burgundy,” Evans said.

And the big question, according to Harrison, is “What will happen at the end of the 90-day pause and negotiation period in July? Will the ‘reciprocal’ tariffs come back? Will the universal tariffs go away? We are walking a tightrope between over-ordering in case of higher future tariffs and under-ordering to not spend thousands of additional dollars in customs fees and storage.”

Harrison’s prediction for the worst-case scenario? “On the distribution side, smaller importers are not going to be able to afford to stay in business, and we will see fewer producers brought to the U.S. On the restaurant and retail side, businesses are going to struggle to stay open as their customer base struggles to afford the day-to-day necessities and can’t go out to dinner or buy a bottle of wine on the way home from work. Either way, we are looking at businesses closing, jobs lost and access to wine and spirits” — both from other countries and from independent producers in the U.S. — ”hindered severely either by lack of market presence or price.”