Tariffs Reshape Northern Michigan Wine Industry Amid Rising Costs and Supply Challenges

Tariffs and other federal policies are having a significant impact on northern Michigan’s agriculture industry, particularly among local wineries. Rising costs, supply shortages, and reduced research funding are affecting farmers and producers across the region. While some of these policies have provided advantages for local businesses, others have led to shrinking profits and new challenges.

In recent years, tariffs on imported goods have changed the way northern Michigan wineries source their materials. Blake Lougheed, winemaker for Harmony Estate Wineries—which includes Bel Lago, Dune Bird, and French Valley—explained that his company previously relied on inexpensive Chinese glass for wine bottles, which was imported through Canada. Due to new tariffs, the cost of this glass has increased to nearly match that of domestic glass. As a result, Harmony Estate Wineries now purchases all of its bottles from a warehouse in Traverse City.

Lougheed noted that while the locally made glass is more expensive—about 25 percent higher than the imported alternative—it is also a better product. Since glass accounts for only about 8 percent of the total cost of a bottle of wine, the price increase translates to roughly 30 cents more per bottle. Despite the added expense, Lougheed sees some benefits to the shift. The tariffs have helped level the playing field between northern Michigan wineries and large-scale European producers.

Local wineries have long struggled to compete with mass-produced European wines on price. “We can’t compete on a cost level with big European wineries,” Lougheed said. “If they’re tariffed, it finally puts us in the ballpark of being able to compete on a store shelf.” He explained that while Michigan producers cannot match the low prices of Italian Pinot Grigio—often sold for $9 a bottle—tariffs could raise those prices to $12, making local wines more competitive.

The impact of these policies extends beyond just wine bottles. Northern Michigan’s agriculture industry as a whole is facing higher costs and supply shortages due to tariffs and other federal measures. Research funding that supports farmers has also been cut back, reducing access to services that help improve crop yields and manage pests.

Some local businesses have found ways to adapt by sourcing more materials from within Michigan. The move toward buying locally produced glass is one example. However, not all producers are able to absorb the increased costs or pass them on to consumers without risking sales.

While Michigan wineries may benefit from tariffs on European wines, Lougheed pointed out that California wineries could be hit harder by these policies. Many California producers operate at such large scales that their profit margins per bottle are extremely thin. For them, any increase in costs can have a significant impact on their bottom line.

The changes brought by tariffs and federal policies are reshaping how northern Michigan’s wine industry does business. Some see opportunities in the new landscape, while others face difficult choices as they try to manage rising expenses and uncertain markets. The full effects of these policies will continue to unfold as local producers adjust their strategies in response to ongoing economic pressures.