This as-told-to essay is based on a conversation with Victor Schwartz, owner of VOS Selections, a wine importing company based in New York. His business is the lead plaintiff in a lawsuit against President Donald Trump’s use of emergency powers to impose tariffs. This essay has been edited for length and clarity.
Suing the government was not part of my business plan, and we have taken a big hit from the tariffs, yet in a strange way, it’s been incredibly energizing to be involved a this case that could help so many.
I founded my business about 39 years ago as an importer and distributor of fine wines, spirits, and sakes. We have 19 people in the company, including me and my daughter.
I started my business in France, and we work with very small producers for cutting-edge products. The idea was to bring in things you don’t find everywhere, and I thought that was really going to be my edge in the business, until the tariffs hit.
I knew I was sticking my neck out as the lead plaintiff of the case, which goes further than just throwing my hat in the ring, but I still decided that I needed to do this.
Tariffs made an already tough business even harder
There hasn’t been enough information on just how complicated this process is.
The prelude to the tariffs is already bad. In our first quarter, we were down 16% compared to last year. Restaurants and retailers we work with are complaining heavily, cutting back products either in anticipation of tariffs or because consumers are not buying.
Then the main tariffs hit in April. My daughter and I spent two full days looking through every product in our book to determine what the tariff impact was going to be, which products we needed to drop, and how much tariffs we could afford to eat. As we all know, all the numbers changed in a few days, and it just keeps happening.
Keep in mind that alcohol is a heavily regulated business. Under regulations in the state of New York, for example, we have to post prices by the fifth of the month prior to the month of sale. Combine that with the time it takes for products to cross oceans and get through customs, this means we have to think about May pricing in March.
We’re in that position of having to make firm decisions about what our pricing is going to be under very uncertain situations. As a small business with more than 600 mostly imported products from 350 producers, that just became impossible.
By now in June, the contraction I have feared is playing out. We go back to a good customer and say, “Hey, you’ve been using this product, but now we have to bring more of it in. Are you interested in this product at the new price?” Most of the time, they say “no.” It’s not like they’re going to buy a domestic product. They’re just going to buy another imported product that is less expensive.
Also, the customs are not going to release our container unless we pay them upfront. A 10% tariff means 10% less of our cash flow, and that means being much tighter on our inventory, reducing and stopping some orders where we could, and not moving forward on new projects.
As we run out of more products and have to raise prices on new imports, it’s only going to get worse as we get into August and September.
I stepped up because bigger players won’t
Retaliation was something I had to take into account when I decided to become the lead plaintiff.
One of the big motivating factors for me to step up is that the big guys in business were not getting involved. The big guys who have the money and power are cowering or defending their own self-interest.
The administration could come after me in many different ways to harm my business. Because this is a heavily regulated industry, we have to work with the government all the time. We deal with the TTB, the FDA, and Customs and Border Protection.
There have always been glitches here and there, but now whenever there is a glitch, I always think in the back of my mind, “Is this a real glitch or is this somebody coming after me?” So far, there is nothing. But I did have to consider potential consequences. If I hadn’t been in this industry for 40 years, I may have made a different decision.
About 99% of the contacts I have gotten are positive, and this has really made me feel energized. It really blows me away that people have taken the time to write me cards and letters — not just “thank yous” but long letters too.
It seems that I have really struck a chord. I guess most lawsuits, in a certain sense, are just you looking out for yourself. But with my case, I just feel like we are trying to do something that’s going to help a lot of people, and that is very empowering.
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