Congressman Calls for Action on Imported Wine, Expanded Access to Bigger Markets

Rep. James Gallagher (D-Callif.) called on U.S. Trade Representative Jamieson Greer to address trade and regulatory policies putting California winegrape growers at a disadvantage as the industry faces declining domestic consumption and continued uncertainty in international markets.

In a letter to Ambassador Greer, Gallagher raised concerns from California growers about federal rules that allow wine labeled “United States” or “American” to contain up to 25% imported wine without disclosing that foreign origin on the label. 

Gallagher also called for a review of federal duty drawback treatment for imported bulk wine and urged USTR to help expand international market access for American wine. 

“North State growers produce some of the best winegrapes in the world, but right now they are competing in a market where federal policy can actually make it easier to use foreign products than grapes grown here at home,” Gallagher said. “We need to make sure our trade policies are working for American growers while opening new markets where California wine can compete and win.”

“California winegrape growers are facing an incredibly difficult market, and federal policies should not make it harder for American-grown grapes to compete,” said Natalie Collins, president of the California Association of Winegrape Growers. “We appreciate Congressman Gallagher raising these concerns with USTR and pushing for policies that better support domestic growers while expanding opportunities for American wine in international markets.”

Under current Alcohol & Tobacco Tax & Trade Bureau (TTB) appellation rules, wine may carry a “United States” or “American” appellation when at least 75% of the wine comes from U.S.-grown agricultural products and the wine is fully finished in the United States. That allows up to 25% to come from foreign-grown products without disclosure of that foreign origin on the label.

Growers have warned that the policy can put downward pressure on California grape prices and blur the distinction between wine made entirely from American agricultural products and wine containing foreign components. Gallagher asked USTR to coordinate with the Department of the Treasury and TTB to examine the rule and its impact on domestic growers. 

Gallagher also raised concerns about the duty drawback treatment available for imported bulk wine. Under the current structure, federal excise taxes paid on imported wine may be refunded based on the export of substituted wine, including in certain circumstances where the exported wine did not bear an equivalent federal excise-tax burden. Gallagher urged USTR to support U.S. Customs & Border Protection (CBP) in reviewing the practice and its effect on domestic growers. 

The letter also asks federal agencies to examine bulk products imported from Canada that do not meet the U.S. definition of wine but nevertheless receive customs and tax treatment applicable to wine.

At the same time, Gallagher is pushing to give California producers more opportunities to sell their products overseas. With access to the Canadian market severely reduced, California growers and wineries are increasingly dependent on new international markets. Gallagher urged USTR to prioritize opening promising markets such as India and Vietnam while working to restore access to Canada. 

“California growers don’t need Washington making a tough market even tougher,” Gallagher said. “We should be looking for ways to give them a fair shot here at home and more opportunities to sell American wine around the world.”

As the 2026 harvest draws to a close, Gallagher called on USTR to work with industry stakeholders to address these issues and provide meaningful relief for growers that remain an important part of California’s rural economy.