The Impact of Tariffs and U.S Immigration Policies on the Wine Industry

Students: Johnathan Perez, Angelica Ramon

Faculty Mentor: Inhaeng Jung

Business Administration

College of Science, Technology, and Business

This study investigates the perceived threat imposed by recent tariffs and immigration policies on the overall sustainability of the U.S. wine industry through the lenses of Resource Dependence Theory (RDT) and Institutional Theory. RDT is employed to analyze how wine businesses manage dependencies on critical resources, particularly labor, which is heavily impacted by immigration policies (Pfeffer & Salancik, 2015). Approximately 75% of California's agricultural workers are undocumented immigrants (Diringer & Sandhu, n.d.). Newly proposed immigration policies that advocate for the deportation of undocumented immigrants pose significant risks to the stability and productivity of the wine industry's labor force (Zahniser et al., 2018). Experts suggest that these policies lead to labor shortages, increased operational costs, and decreased efficiency (Zahniser et al., 2018). Concurrently, Institutional Theory is used to explore how these businesses adapt to and are shaped by the institutional pressures of changing trade policies (DiMaggio & Powell, 1983). The imposition of tariffs on imported goods could increase the cost of production materials and equipment for wineries, negatively impacting profit margins. Additionally, tariffs could hinder the export of California wines, making them less competitive in global markets.
The research combines quantitative data analysis and qualitative interviews with vineyard and winery owners to assess the consequences of deportation threats and tariffs on the sustainability of the U.S. wine industry. The findings will assist the industry in adapting to these challenges, potentially through technological innovation, and highlight the need for strategic planning and advocacy. Through a combination of interviews with current industry professionals, a review of relevant literature, and an assessment of evolving situations regarding tariffs and immigration policy changes, a survey was developed using Qualtrics. We plan to collect data in March. The survey is divided into five sections: Tariffs and Trade Policies, Threat Imposed by Immigration Policies, Other Threats, Business Outlook and Strategies to Mitigate Impact, and Business Profile and Characteristics. Utilizing networks across various industry platforms, such as the Wine Industry Network and the Wine Business Institute, the survey will be distributed, inviting wine industry professionals across the United States in managerial roles to participate. An IRB review is underway, and we aim to gather responses from 300 participants nationwide. This analysis will enable us to identify the perceived threats posed by both tariff and immigration policies and examine how these perceptions vary based on business characteristics, such as production size, years of operation, ownership structure, and location (globally recognized wine regions vs. others).
The implications of this study are multifaceted, offering valuable insights for industry adaptation and resilience, informing policy advocacy, guiding workforce development, and influencing strategic business planning. Additionally, given the significant role of the wine industry in our local region, this research contributes to academic discussions on the economic impacts of macro-level policies on agricultural sectors, providing a comprehensive case study of the wine industry's response to external economic pressures. This study not only aids in strategic decision-making but also underscores the need for an industry-wide evaluation of practices and policies to enhance sustainability and competitiveness in a changing economic landscape.