Escalating trade tensions between the U.S. and Europe are being closely watched in California’s already struggling iconic wine industry.

The price of wine is expected to drop to its lowest levels in five years thanks, in part, to a surplus of California grapes. Rob McMillan, founder of Silicon Valley Bank's Wine Division and author of the annual State of the Wine Industry report, predicts US wine consumers will enjoy the "best wine retail values in 20 years." "The main cause of oversupply today is the culmination of a few years of slowing wine shipment growth, with an ample 2018 wine grape crop as an exclamation point," Bitter said. But he thinks that improved value on wine could lead to millennials becoming "more consistent wine buyers." “This oversupply, coupled with eroding consumer demand, can only lead to discounting of finished wine, bulk wine and grapes.