USTR's 25% Retaliatory Tariff on Wines from France, Spain, Germany and UK Remains in Place
February 17, 2020
The tariffs that have been imposed on French and other European wines remain in place, the U.S. Trade Representative announced Friday after markets closed.
The 25 percent tariffs were put in place mid-October on still wines under 14 percent alcohol over a dispute over European subsidies on the commercial aircraft company Airbus. The industry feared the U.S. Trade Representative could increase the tariffs to 100 percent. The tariffs were imposed after World Trade Organization arbitrators decided the US could impose tariffs on $7.5 billion worth of European imports, including wine.
U.S wine distributors, wine shops, restaurants, and others have opposed tariffs on wine and spirits saying they will hurt US businesses and cost jobs.
The Wine Institute and WineAmerica and other organizations have urged the US Trade Representative to end the tariffs, saying jobs have been eliminated and hiring has been halted because of the current tariffs on beverage alcohol. The tariffs could potentially cost up to 78,600 jobs, trade organizations have said repeatedly.
“We continue to oppose the targeting of wine with retaliatory tariffs in a dispute that has absolutely nothing to do with wine. This has been our position for nearly two decades because it is clear that this ultimately hurts the entire wine marketplace, including U.S. producers,” said Robert P. “Bobby” Koch, President and CEO of Wine Institute, on Friday. “We urge both governments to negotiate a settlement to this dispute as quickly as possible.”
Imports of French wine have plunged since the tariffs were imposed. French wine imports decreased by 26.6 percent in volume in November/December 2019 from November/December 2018, according to BW166.
The value of red, white and rosé packaged wine imports decreased by 49.2 percent during that same time period, according to BW166.
Harry Root, founder of the U.S. Wine Trade Alliance applauded the decision not to increase tariffs even more but called the status quo a “shallow victory.”
“We applaud the Administration on its restrain in not increasing or expanding the tariffs on European wine. Wine tariffs remaining at the status quo is a testament to the hard work put in by the wine industry, but it’s still a shallow victory,” Root said.
The 25 percent tariffs on select European wines will continue to “hammer” US business owners and consumers, he said. Tariffs on wine are not effective because the United States is “immediately replaceable as a trade partner,” he said.
“China is a ready and willing customer for European wines that are being diverted away from American importers because of these measures,” Root said.
“This policy is a clear disaster for the wine industry and for US consumers. And…it’s not punishing Europeans one bit!” Root said.
The Trump Administration on Friday raised tariffs on Airbus airplanes from 10 percent to 15 percent.