Trump’s trade dispute drives some Napa wineries’ sales to Canada to zero

Napa Valley wineries say a trade dispute with Canada and President Donald Trump’s tariff policies are cutting into exports, raising costs, and reducing visits from one of the region’s most important groups of foreign tourists, adding new pressure to an industry already dealing with changing consumer tastes.

The concerns are being felt across Napa Valley in Northern California, where wine production and tourism are closely linked. Winery owners and tourism officials say the region built a large part of its business on international demand, both from overseas buyers and from travelers who come to taste wine, stay in hotels, and spend at restaurants and shops. They now say that part of the market has weakened.

“Nobody is benefiting from tariffs,” Ivo Jeramaz, who runs Grgich Hills Estate, told AFP. He said the trade measures have increased production costs and hurt exports. His winery, he said, once sold more than 1,000 cases of wine to Canada. “Now we have zero since tariffs,” he said.

Canada has become a focal point of the strain. Ottawa and Washington are in a deep trade dispute that has worsened as Trump has repeatedly insulted Canada and said it should become the 51st U.S. state. In response, some Canadian provinces have removed U.S. goods from store shelves. At the same time, some Canadian travelers who might have visited California have stayed home.

For Napa Valley, that has meant pressure on two fronts at once. Wineries are losing sales into an export market, and local businesses are also seeing fewer Canadian tourists. Linsey Gallagher, president of Visit Napa Valley, which represents the region’s hotel industry, told AFP that the biggest impact has come from the decline in Canadian visitors.

International tourism has dropped sharply as a share of Napa’s total visitor base. Gallagher said about 20% of visitors to the region used to come from abroad. That figure has fallen to 8%. Businesses have tried to make up the difference by putting more of their marketing money into the domestic market.

So far, that effort has provided some support. Napa Valley welcomed about 3.8 million visitors last year, up 3% from pre-pandemic levels, according to figures cited by tourism officials. But Gallagher said there is a limit to how much more can be drawn from nearby and domestic travelers alone. A full recovery, she said, depends on the return of international business.

The strain is especially significant in Napa because of how the local economy works. More than 1,000 vineyards line the valley, and many wineries depend on a mix of tasting room sales, restaurant and hotel traffic, and exports through distributors and retailers. When trade barriers rise and a major foreign market pulls back, the effect can spread beyond one producer’s sales ledger. It can disrupt distribution plans, narrow margins, and add to cost pressure across the wine business. That matters for the broader beverage sector as well, because wine producers often share retail channels, logistics networks, and shelf competition with beer and spirits brands.

Napa Valley has long depended on its international profile. The region’s reputation surged in 1976 after the “Judgment of Paris,” a blind tasting in which Napa wines outperformed leading French rivals in major categories. The result helped turn a farming region into a global wine destination.

Jeramaz has a personal link to that moment. His uncle, Mike Grgich, made the 1973 Chateau Montelena Chardonnay that won top honors among white wines at the Paris tasting. Jeramaz told AFP that Napa had little publicity before that event, but that it quickly became a destination once the news spread. Wealthy visitors arrived, investment followed, and the valley expanded.

That long period of growth has now cooled, he said. The tariff fight is not the only reason. Wineries are also facing a slower shift in drinking habits, especially among younger consumers, who are generally drinking less alcohol than older generations and are making different choices when they do buy.

Producers in Napa say they are trying to adjust by changing how they present wine to younger customers. Ali van Zyl, owner of the Belong Wine Company label, told AFP that younger buyers often respond less to brand history alone and more to how wine is grown and made. They want information about environmental practices, farming methods, and the social values of the business, she said.

That has pushed some wineries to focus more on the story behind the product. Instead of relying only on prestige or tradition, they are emphasizing wine as an agricultural product tied to the land, with a production process that can be explained directly to visitors. In a region where tasting room experiences remain central to sales, that shift is also part of a broader effort to make winery visits feel more personal and relevant to a younger audience.

Tourism officials and business owners are also trying to sell Napa as more than a wine destination. They are promoting the valley’s food, hotels, outdoor activities, and landscape in an effort to attract visitors interested in a broader lifestyle experience. That includes positioning Napa as a place for hiking, cooking, and slower travel, rather than only for formal wine tasting.

Laura Gabriel, van Zyl’s partner in the River Club tasting house, told AFP that the region wants to connect wine with a more health-conscious and outdoor-oriented image. That approach is meant to widen Napa’s appeal at a time when both export sales and foreign tourism are under pressure.

For now, the valley is still drawing millions of visitors and remains one of the best-known wine regions in the United States. But winery owners and tourism officials say the combination of higher trade costs, lost Canadian sales, and fewer international guests is exposing how much Napa’s business model depends on stable cross-border ties.