Why industry stakeholders must continue to oppose the wine tariffs

A momentary window of hope has opened with respect to the 100 percent tariffs the United States has threatened to impose on wines from the European Union. It won’t stay open unless we all help keep it that way.

It is critically important for the entire wine community in the U.S.—spanning consumers, retailers, distributors, importers, the media, and associated sectors—to focus on how much is at stake. And it is important that you continue to be counted on this issue. It is likely to drag out.

Specifically, we need to strengthen the diverse and unprecedented stakeholder coalition that has come together to underscore the enormous damage that will ensue if trade disputes spill over into the wine world.

That coalition, through efforts such as Zachys Fine Wine President Jeff Zacharia’s, did extraordinary work early this year. It helped legislators, policymakers, and the public understand why devastating tariffs on wine would be a big net loss for the U.S.—extending far beyond the wine industry and wine consumers. Its work was likely instrumental in the U.S. decision February 12 to effectively pause a decision on implementing the tariffs for 180 days.

Several times I’ve reached out to friends and readers about this. This may have been the first time I’ve commented so specifically on a broader policy issue. But it is that important to me personally, because of the potential impact on the wine “ecosystem” I’ve spent my entire adult life supporting.

To recap, the proposed tariffs would cripple the transatlantic wine trade and potentially kill tens of thousands of associated American jobs. By this move the government would be sharply curtailing the freedom of choice of American consumers, and dictating their choices. The tariffs would result in a loss of many billions of dollars of federal, state and local tax revenue.

The taxes would also be devastating to the many producers in Europe—and their vineyard workers, suppliers, transportation partners, technical staffs, and people all through the industry’s supply chain —who have built their livelihoods counting in good faith on the extraordinarily close partnerships that characterized U.S.-EU relations until recently.

Precisely because our wine worlds are so interconnected, they are tempting targets for governments trying to exert leverage and they are excellent headline makers.

I’m not qualified to take positions on the underlying disputes in large civil aircraft and digital services taxation that have gotten us to this point. I know the disputes involve important interests on both sides. But I also know that destroying the transatlantic wine trade in the process of trying to resolve unrelated trade disputes would be a pure lose-lose proposition.

So, I hope with all my heart we don’t cut off our nose to spite our face on this one.

Here’s where we are now: the United States has decided for the moment not to implement its proposed 100 percent tariff on EU-origin wine, and will revisit the issue in 180 days. Another proposal to impose 100 percent taxes on French sparkling wine is on informal hold. U.S. and EU trade experts are talking about the bigger underlying issues.

But, there is a lot that still can go wrong. The United States’ announcement February 12 explicitly noted the decision to pause tariffs could be “revised as appropriate immediately” in the event the EU imposes additional duties on U.S. products in connection with the aviation dispute.

Beyond technical issues, it’s anybody’s guess how unusually fraught electoral politics in the United States and Europe may affect this issue.

So, it’s incredibly important for everyone to engage on this issue—individually, and through coalition efforts. Please make sure your elected representatives, at state and national levels, understand how strongly you feel. Support organized efforts to ensure the policy community and the broader public understand just how much is at risk.

Preserve drinking great wines in America from all over the world.

Support these efforts, voice your opposition here

– James Suckling, CEO & editor