Here we go again.
You may not be aware, but the outgoing Trump administration slammed a new round of 25 percent taxes on a variety of wines and spirits from France and Germany. They were announced on New Year’s Eve and took effect January 12.
The new tariffs – World Trade Organization (WTO)-authorized retaliation for EU subsidies for Airbus – apply to still wines over 14 percent alcohol and distilled grape-based brandies. As such, they will primarily affect French and German producers and the wine ecosystem in the United States that purchases their wines. That world in America is overwhelmingly one of small businesses and the affected will be tens of thousands of them, including importers, distributors, wine shops, restaurants, and of course, consumers.
The new taxes will further depress sales, and jobs, at a time when many businesses (especially restaurants) and people are reeling from the global pandemic. The Trump administration’s last round of 25 percent tariffs on many European wines, still in place, cut sales by over 50 percent on the targeted wines, by some calculations.
The U.S. administration hopes, as we’ve noted before, that these new taxes will put pressure on European trade negotiators to make concessions in the civil aircraft dispute at the root of this. Nobody is arguing that it isn’t a serious dispute, and the new wine taxes are within the legal framework for retaliatory measure the WTO authorized the United States to take.
But, the truth is, the new taxes, like the old taxes, may pressure Europe; but, overall, they will hurt Americans more. They hurt in lost jobs, lost sales, and lost federal, state and local tax revenues – and at the worst possible time. And it’s yet another example of this U.S. administration taking choice away from American consumers.
The hurt to small business in the US is amplified by other WTO-authorized retaliatory steps the EU has taken against American products, including spirits, because of counter suits regarding alleged unfair advantages the United States has given Boeing.
It would be tempting to think the new U.S. administration might bring some adult supervision to the proverbial food fight and maybe, with European counterparts, take a time out and stop penalizing small businesses and consumers in areas unrelated to civil aircraft.
James in happier times with Tristen Beamon of Wine Exchange in the U.S. Many merchants just like Beamon would be devastated by more tariffs.
Who knows what will happen? Obviously, the world’s leaders – and all of us – are focused on far more urgent challenges now. And rightly so!
It is going to take some time for the Biden administration’s trade team to assess priorities and take care of extremely important issues such as COVID and the economy before it gets to these tariffs. At least, the Office of the U.S. Trade Representative is scheduled to review existing wine tariffs in February and August of this year.
It would be a good idea for any like-minded consumers or trade stakeholders to chime in again on the wine tariffs. One very easy way to do it is through this link.
Above all my friends, stay well, stay safe, and keep the faith that we’ll bring about better times, and I hope we all drink great wines, even if some are more expensive now for the wrong reasons.
– James Suckling, editor & CEO
Tariff content previously published on JamesSuckling.com:
Leave wine out of the trade wars
Official comment: Opposing the proposed tariffs on EU wines
U.S. wine tariff fight must continue
Why industry stakeholders must continue to oppose the wine tariffs
U.S. wine industry must speak out (again) against proposed tariffs
You spoke, they listened: US cancels proposed 100% European wine tariffs
2 thoughts on “Please … No more wine tariffs!”