The New War Against Wine
Update – (March 2021) The U.S. has agreed to suspend all tariffs on French wines for the next four months. This is great news for importers, retailers, restaurants, and consumers. However, it still leaves uncertainty for the market in the long-term. Nevertheless we are hopeful that these punitive tariffs will be permanently repealed in the near future.
Update – The U.S. has postponed the proposed the possible 100% tariffs on all European wines as well as the 100% tariff on French sparkling wine. They still, however, reserve the right to implement them at any time.
Unfortunately, the 25% tariff on wines below 14% alcohol from France, Spain, and Germany is still in place. With restaurants shuttered during this global pandemic, things are already difficult for the wine industry. Lifting this tariff would be a simple and quick way to help distributors, importers, retailers, and consumers during these difficult times.
The wine industry is currently dealing with a 25% tariff on French, Spanish, and German wines (under 14% alcohol). That tariff is in retaliation for subsidies given to Airbus by the European community. They are now talking about expanding that tariff to all European wines, and possibly increasing the tariff to 100%. Depending on how it is implemented, a 100% tariff would make it impossible for us to import French wines at all. The current 25% tariff was announced just a couple of weeks before it was implemented. We, like many other importers, had wines that shipped before the tariff was announced, and that landed after it had taken effect. Since the wine had already left France we couldn’t react and were forced to pay the tariff. These tariffs are supposed to be a retaliation for Airbus subsidies, but so far they seem to only be hurting American business.
Apart from the current tariffs, the current administration is now proposing a separate 100% tariff on all French sparkling wines. This tariff is supposed to be retaliation for a proposed “Digital Service Tax” of 3%. Though many European countries plan to enact the same tax, France is the first to try to implement it, and has therefore become a target.
In 2018, the EU was the largest export market for California wines. The EU could retaliate by levying tariffs on US wines, which would be devastating to American wineries.
Summary of the three, separate, but interrelated problems for the wine industry:
1 – Current Airbus/Boeing dispute – October 25% tariff on French, Spanish, and German wines under 14% alc., sold in container of less that 2 liters, (excluding sparkling wines).
2 – In January these tariffs could be expanded to all EU wines, with a tariff of up to 100% on all European wines. This tariff would also affect handbags, cosmetics, spirits, and a large swath of other European products. Postponed
3 – 100% tariff on all French sparkling wines – Tariff in retaliation for France’s Digital Services Tax, France signed into law a digital services tax – which is a 3 percent gross receipts tax on receipts from certain digital services sourced to France. Postponed
If our government does move forward with these tariffs the effects will devastating to American wineries, retailers, distributors, importers, restaurants, and the hospitality industry in general. Sales of these wines pay the salaries of drivers, warehouse workers, restaurant staff, and a myriad of related jobs. If you want to learn more, comment, or make your voice heard, please follow the links below:
- Change.org – Save wine Jobs Petition
- Administration Considers 100 Percent Tariffs on All European Wines
- Submit testimony in regards to proposed Action on French Sparkling Wines (search for USTR-2019-0009. Written testimony must be delivered by Monday, January 6)
- Submit testimony in regards to the action regarding the potential tariff increases on ALL European wines ( search for USTR-2019-0003. Written testimony must be submitted by Monday, January 13 )
- Open letter from Cutting Edge Selections
- The New War Against Wine, By: Marvin R. Shanken (Wine Spectator editor and publisher)
- Antonio Galloni’s letter to President Trump (Vinous Media)