AYESHA RASCOE, HOST:
Canada is eliminating a big chunk of its tariffs on U.S. imports. On Friday, Prime Minister Mark Carney announced retaliatory tariffs for goods covered under the U.S.-Mexico-Canada Trade Agreement would end next month. Canada has been charging a 25% tax to many U.S. imports in response to President Trump's own tariffs on Canadian goods and persistent threats of annexation. For American wine and spirit makers, these retaliatory tariffs have been devastating. The Distilled Spirits Council and Industry Group says hard liquor exports to Canada are down 62% so far this year. Canada is also the biggest importer of U.S. wine. At least, it was. Exports of vino are way down - 67% compared to last year.
Let's talk through some of this with Joan Kautz, vice president of international operations for Ironstone Vineyards in Murphys, California. Welcome to the program.
JOAN KAUTZ: Hi. Thank you for having me.
RASCOE: Does this agreement, with Canada announcing the end of those retaliatory tariffs - does that mean back to business for you and for your industry?
KAUTZ: Not sure it's quite back to business yet. There's been a lot that's happened over the last months and within the market, and the Canadian sentiment and everything towards U.S. products and California wines and everything. So there's still quite a bit of work to do, but I'm looking forward to being able to get back into the market. And they say time heals all wounds, right? And so I'm hoping that we'll really show the Canadians we love them and we'd love to share our products with them.
RASCOE: Tell us about your winery. Like, what products do you sell? How many people do you employ?
KAUTZ: Well, we're based in Murphys, California. And we sell wines, California wines, from both the Lodi and Sierra Foothills appellations. We employ a few hundred people just based, you know, within our wineries and our vineyards and everything and our farming production areas. So it's been very impactful, all of this.
RASCOE: So how has Ironstone been affected?
KAUTZ: Well, Canada represents close to a quarter of our exports, so it has been definitely affected. We're fortunate in the sense that we export to about 50 countries and then, of course, have the U.S. market. We always have the rule of, don't put all your eggs in one basket. That being said, Canada's by far one of our most profitable markets, and it's a market we've been working in for, you know, close to 30 years now. So to go from building it up and, you know, gaining brand recognition and everything throughout the whole country to all of a sudden, all your products are off the shelf is devastating.
RASCOE: What are you hearing from others in the industry?
KAUTZ: You know, it varies from winery to winery. But there are some wineries that were very heavily focused on Canada, and it has severely hurt their shipments, their sales, their production, everything. The U.S. category or the wine right now is having its challenges, to say the least. So to have something like this on top of it, where one of your top markets is cut off, is very, very challenging.
RASCOE: How do you deal with that? Because you mentioned, like, Canadian sentiment. Like, even if the tariffs are gone, is there any way to kind of mend those fences with the actual Canadians?
KAUTZ: You know, there's a lot of Canadians that absolutely love California wines, and California wine is - has a very special place in their hearts. There will always be those people that may boycott California, may boycott U.S. products. We hope that over time, that sentiment decreases and they, you know, get back to what they love. And we know that they love the special uniqueness of California wine.
RASCOE: As a businessperson working in an industry that makes a good chunk of its money through international trade, how does it feel to operate in this, like, really uncertain landscape?
KAUTZ: You know, I take it day by day. I'm hoping that the long term of this is going to be beneficial for the U.S. as a whole and for California wines. There's a lot of countries that have substantially higher tariffs on California wines versus maybe the EU or Chile or Australia or anything. So we've been competing internationally in a difficult market with a lot of unfair trade practices. I'm an optimistic person. And I want to stay optimistic that the long term of this will hopefully be beneficial for us to be able to do more export.
RASCOE: That's Joan Kautz. She's the vice president of international operations for Ironstone Vineyards in Murphys, California. Thank you so much for joining us.
KAUTZ: Thank you. Thank you for having me. Transcript provided by NPR, Copyright NPR.
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