What Restaurant Owners Need To Know About Proposed European Wine Tariffs
A new proposal by President Donald Trump would levy tariffs of up to 100 percent on $2.4 billion worth of products from the European Union (EU). In a testimony before the Office of Trade Representative (USTR) this month, American-based business owners warned that the tariff would raise prices for consumers and cause a ripple effect across the industry.
The tariff, even though not in effect, is already costing jobs, hurting businesses, and causing instability in the wine industry. It could be days or months before the USTR makes a decision about the tariff. The Wine and Spirits Wholesalers of America estimates that the tariff would destroy 17,000 American jobs.
Quick Facts
A tariff proposed by Trump would levy tariffs of up to 100 percent on imported wines and other goods from the EU.
A 25 percent tariff on select imported wines and Champagne went into effect in October 2019 as a result of subsidies provided to fund Airbus.
Importers and distributors are already absorbing the 25 percent tariff so consumers won’t see a price increase in stores.
Trump’s proposal is meant to be a form of retaliation against a tax on digital services that France passed this summer. The USTR released a report in December 2019 that showed France’s latest tax affects large American technology companies like Facebook and Google and represents a barrier to trade. Trump and his administration criticize France’s tax, stating the tax disproportionately targets American technology companies and is not consistent with international tax policy.
The wine industry in the U.S. is already struggling with a tariff that was put in place in October 2019. The U.S. administration imposed a 25 percent tariff on most European wine in retaliation for subsidies provided by Europe to fund aircraft maker Airbus. Since the implementation of the tariff in October, the administration has threatened to raise the tariff due to the lack of progress in resolving the issue.
Importers and distributors are absorbing the cost of the already active 25 percent tariff which means most consumers will not see an increase in stores. The situation is similar to the tariff imposed on Chinese-made goods. Trump’s proposed tariffs would target a huge range of French goods such as cheese, wine, handbags, makeup, and cookware.
USTR's commenting period on the latest tariff closed on Jan. 13, but there is still plenty that restaurant owners can do. The Wine and Spirits Wholesalers of America is urging restaurant owners and other businesses in the industry to reach out to members of the House and Congress. Businesses and distributors need to help educate policymakers about the ripple effect that these types of tariffs will have on the industry.