The Tariff Experience

Tariff talk was everywhere this week, as more and more folks are coming to the realization that a COVID-like supply shock is approaching.  This slow-motion tsumnai in the Pacific is not a drawback of the shoreline, but a parade of empty ships sailing into west coast ports.

As Greg Shugar wrote to customers this week, it’s a good time to buy.

I spent a few days this week enjoying a quick getaway to Napa, California.  The wine capital of North America is the perfect place to clear one’s mind, enjoy some really good Cabs, and forget about tariff stress…

Or so I had thought.

Napa is a beautiful place and Napa wine is very enjoyable.  The problem with Napa, unfortunately, is the hoity-toity arrogance that one sometimes finds with products in the luxury goods space.  Of course not everything, or every participant in the Napa wine industry are like this, but you see just enough ’tude to make it unpleasant. 

Napa is selling you two things when you visit.  It’s selling not just the wine of Napa, it’s selling the “Experience” of Napa. 

This is what all brands are trying to accomplish when selling their product:

Coca-Cola isn’t selling sugar water, it’s selling refreshing nostalgia.

Dodge isn’t selling a pick-up truck, it’s selling roll-up-your-sleeves toughness.

Ikea isn’t selling difficult to assemble furniture, it’s selling an argument with your spouse.

And Napa is selling the Napa “Experience”.

You can’t get away charging $50 for three sips of wine and expect the customer to be satisfied.  But with the “Experience”, well, fifty dollars is a bargain!

The “Experience” looks like this:  Palatial tasting rooms with private nooks and comfy, oversized couches, Michelin rated artisanal snacks, hosts and hostesses donning name tags armed with long stories about each grape and vine, how they were picked at dusk, crushed with bare feet, stored in amphora shaped tanks which allows for micro-oxidation, barreled in 30% French oak and cellared for years to age.

The service is 5-stars and off-the-charts. For many, this is what they are looking for while on vacation.  But, for me, after 90 minutes of listening about how a single-vineyard varietal I don’t remember will taste with a meal I’ve never heard of, I’m ready to move on.

The Experience is a performance.   A distraction from what is actually true. I felt a little like the Spanish Prisoner.

I wasn’t really in a palace or chateau, but a grape farm.  It’s not really a Michelin rated snack, it’s a Ritz with Trader Joe’s cheese.  The grapes weren’t hand picked by the winemaker, they were scooped up in mass by machines.

Speaking of the winemaker, they’re nowhere in sight!  Because in addition to the job at this vineyard, they consult with other wineries and also have a side hustle marketing their own label, to make ends meet.

The sleight of hand is to distract the customer from the actual product: The wine, “The Juice”.

I don’t want “The Experience”, I just want “The Juice”!

This week we heard all sorts of stories coming out of both Washington and Wall Street about private events discussing softening positions on trade with China.  We heard about good meetings with India and Japan.  “We’re close: 😉”.

We even read about US semiconductors shipping into China. 

These narratives are building up anticipation for trade deals that will generate a win-win for the US and global economy.  It’s boosting the stock market, and giving CEOs newfound confidence that this self-inflicted and impending economic dip will be over soon.

Welcome to the “Tariff Experience”. 

Intangible evidence that something else is going on, a distraction from reality.  Uncle Sam playing the up-close magician.  As was pointed out this week, good meetings usually are not so good.

The business community is desperate for the plan, the long-term vision, and the course on tariffs.  Let business leaders execute their strategies within a framework of the rules in place.  When the goalposts shift, and shift again, and again, who’s can plan, and plan big?

The evidence today is overwhelming and one only needs to look at the shippers and the incoming tax revenue to see what’s really going on. The data is screaming that a tsumni is on the horizon.

Napa makes great wine. At the end of the day, that’s all what matters. Not a story, or a view, but a bottle of something good.

Business owners, leaders, and decision makers are not looking for a Tariff Experience…they just want The Juice!