Uh oh, Pinot: How tariffs will impact the U.S. wine economy

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4.8 • 1.3K Ratings

🗓️ 8 April 2025

⏱️ 8 minutes

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Summary

Care for a glass of Chianti or Bordeaux after recent market volatility? It'll cost ya. After a tense few weeks, President Donald Trump announced a 20% tariff on all EU goods, including wine. While you might think that U.S. producers would be cheering, domestic wineries and wine shops are worried. Plus, there's an ongoing tug-of-war in the bond market, and there's a rally on Capitol Hill today over cuts to humanitarian aid.

Transcript

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0:00.0	We're seeing a brisk updraft in the stock market this morning. I'm David Brancaccio in Los Angeles. After the U.S. Treasury Secretary Scott Besant appeared on TV, stressing that tariffs are leading to negotiations, it was a hint, at least, that some of President Trump's import taxes may not persist in the fullness of time. Stocks then surged higher. The Dow is up 2.9 percent, about
0:24.8	1,100 points. The S&P is up 2.9 percent. The NASDAQ composite is up 3.4 percent. Conversely,
0:32.2	bonds that have been riding higher as stocks plummeted in recent days. Well, those are down today,
0:36.9	pushing interest rates higher.
0:38.2	The 10-year rate is up at 4.24% after dropping below 3%. Jeffrey Cleveland is chief economist at
0:45.1	Payton N. Regal, an investment firm that knows its way around bonds.
0:48.9	Well, I think it was hectic and stressful for everyone. But as a bond market economist, when people say the market,
0:54.7	first thing I think of, David, is the yield on the 10-year treasury note, the U.S. Treasury
1:00.6	note.
1:01.5	And over the last few weeks, that yield has, what we'd say, plunged in response to some of the
1:07.9	events of the world.
1:08.7	So as stock market sold off, bond yields fell. And that
1:12.9	relationship is a good reminder that investors need bonds in their portfolio, I think.
1:18.6	Yeah. And I do take your point, but I also take your point that it has also been volatile for
1:23.0	bond portfolio holders because this morning it's all reversed. Stock market's up and interest rates are up
1:29.2	because bonds are down. It is a volatile time for really everybody. That is true. And I think what the
1:34.7	bond market is wrestling with, David, are two different forces. The tariffs could slow the
1:40.7	economy and bring down economic growth and therefore push down bond yields. On the other hand,
1:46.8	at least in the short run, I think the tariffs will push up prices, which could create inflation.
1:52.5	And bond investors hate inflation, David. And that has the consequence of pushing yields back the
1:57.8	other directions. So we sort of have a tug of war or a battle going on right now
2:02.2	as well in the bond market. Jeffrey Cleveland is chief economist at Paden and Regal, the investment firm.
	...

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