Last year the Trump administration placed a 25% tariff on a broad section of European wines as part of the WTO judgement against the European Union (EU) in the Airbus subsidy dispute, which the US argued unfairly disadvantaged US based Boeing.
The tariffs are now coming up for review by the US Trade Representative (USTR), who will decide whether to continue with the wine tariffs or cycle off wine and place the WTO awarded tariffs on other European products with the goal of pressuring the EU into ending the Airbus subsidies. In an interview (video above), Ben Aneff, President of the US Wine Trade Alliance argues that the three tier system in the US means that the wine tariffs damage US wine companies more than the European producers.
“For every dollar of damage tariffs on wine do to the EU, they do a little more than four times that damage to businesses here in the US,” says Aneff.
The US importer, distributor, and retailer all suffer from the imposed tariffs, and it is even dubious whether US wineries benefit, because there isn’t necessarily a clear substitution in the consumer’s mind between a French White Burgundy and a California Chardonnay, so they may opt to buy less wine or even a different imported wine.
Aneff is also Managing Partner in Tribeca Wine Merchants, and he could see a direct impact of the tariffs on the business. “Prices on key items are significantly higher, it’s resulted in fewer sales from those products, and there’s no question of people that are passionate about White Burgundy going to buying more California Chardonnay, that’s not the way it works, it’s not the way we (wine enthusiasts) see things.”
Furthermore, the Coronavirus pandemic and recession has hurt a lot of business, but the widespread restaurant closures has compounded the hardship for US importers and distributors who sell a great deal of their products to on-premise establishments.
The US Wine Trade Alliance encourages everyone to reach out to their representatives in Congress and the office of US Trade Representative directly during the comment period, which is now open to help persuade them to remove the wine tariffs and change tactics in the aircraft trade dispute with the EU.
“Consumers and businesses should write to the USTR and ask that they carousel off of wine tariffs and put the tariff on something that’s less damaging to US small business and more likely to influence the EU to change their behavior with respect to Airbus,” says Aneff.
Visit uswinetradealliance.org for more information on how to contact the USTR and what arguments to make to help fight the wine tariffs.
By Kim Badenfort