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NABI Opposes Ill-Timed Airbus Tariffs Revisions By United States Trade Representative

 

A New Year, A New Approach – Both U.S. and EU Must De-escalate by 180-day Cooling Off Period  

The United States Trade Representative (USTR) announced major revisions to the current Airbus WTO trade dispute additional duties, also known as “retaliatory tariffs.”  The expanded list of products covering wines and spirits only exacerbates an untenable business environment for importers, distributors, retailers, and consumers facing the pandemic economic downturn.  U.S. companies and consumers, ultimately, pay these tariffs much like they pay taxes; the EU does not.  

“This is more than frustrating; it is reckless at this late date in the sunset of Ambassador Lighthizer’s tenure” as U.S. Trade Representative, said Robert M. Tobaissen, president, National Association of Beverage Importers.  “Having failed to negotiate a settlement of this 16-year dispute, he throws gasoline on the fire as he prepares to ‘get out of Dodge’ only to increase the trade policy challenges by the Biden/Harris Administration. He should be consulting with the Transition Team and not building new barriers with our allies in the EU,” Tobiassen said and added “A new year has started, so should a new approach.”  NABI has consistently proposed a 180-day suspension (as authorized by U.S. trade law) of the Airbus tariffs provided the EU suspends the Boeing tariffs for the same time period, to allow de-escalation and also provide time for the incoming Biden/Harris Administration to review and evaluate the tariffs as it develops its trade policy with our longstanding allies in Europe.  “During this cooling off period, not only will tensions be reduced between the U.S. and the EU but importantly both USTR and the UK Secretary of State for International Trade may on the margins of the U.S.-UK Free Trade Agreement negotiations resolve the UK aspects of the Airbus matter, thereby, providing clarity for removing the issue from the Airbus settlement negotiations” said Tobiassen.  

The revised Airbus tariffs now include additional wines and spirits from France and Germany.  All still grape wines (including Tokay and Marsala) either above or below 14 percent alcohol by volume (ABV) and in a container of any size are subject to a 25 percent retaliatory tariff at 12:01 am, January 12, 2021.  Bottles and bulk imports of these wines are tariffed.  Effervescent wine but not sparkling wine is also added.  Currently, Airbus tariffs of 25 percent are imposed on grape wines not over 14 percent ABV in containers of not more than 2 liters are tariffed.  

The revised Airbus tariffs now include distilled spirits derived from grape wine or must, such as brandy, Armagnac, and Cognac are covered here (but not Calvados) in containers not over 4 liters and having a value of over $38 per proof gallon.  Pisco and Singani are expressly excluded.  Currently, Airbus tariffs of 25 percent are imposed on single malt Scotch whisky and Irish whiskey and liqueurs and cordials from certain EU Member States.  

“The rationale of the timing selected by the EU Commission for the timing of the trade volume determination is a technical argument at best and one that does not merit the potential risk of the EU simply retaliating,” said Tobiassen, and adding; “It is wishful thinking regardless of the statement in the USTR Press Release that the U.S. showed restraint in the adjustments it made when adding more products to the Airbus tariffs list in a manner so as not ‘in order to not escalate the situation.’  In this season of “perpetual joy” to quote Charlie Brown, this gift is more like a lump of coal from Charles Dicken’s immortal protagonist saying “Bah Humbug.” 

NABI is a nation-wide trade association representing importers of wine, distilled spirits, beer, malt beverages, cider, and mead since 1935.  NABI is the “eyes, ears, and voice” for these importers in the Nation’s Capital and the consumers they proudly serve.  

For further information, please contact NABI at (202) 393-6224 or nabipresident@bevimporters.org   

 


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