More Wine Tariffs Imposed on France and Germany by U.S. -- Update
By Yuka Hayashi
WASHINGTON -- The Trump administration said it will target more
French and German wine and spirits with 25% tariffs starting Jan.
12, in the latest escalation in a tit-for-tat tariff fight related
to a longstanding dispute over commercial-jetliner subsidies.
Among the new levies, the U.S. will for the first time apply the
25% levies on wines from France and Germany that exceed 14%
alcohol, which had previously been exempt, according to the Office
of the U.S. Trade Representative.
The U.S. had seen a surge in these higher-alcohol wines,
typically from Spain and France, after wines with 14% alcohol or
less were hit with tariffs in October 2019.
"With particularly what's happening in light of the pandemic,
with restaurants closures and distillery closures, this just is not
the right time to be hitting an industry that's already dealing
with the economic impact," Christine LoCascio, chief of public
policy for the Distilled Spirits Council of the U.S., said
Washington imposed 25% tariffs on wine from France, Spain,
Germany and the U.K. in October 2019 in retaliation for subsidies
they made to the European aircraft manufacturer Airbus SE, arguing
they hurt Boeing Co.
Other items that will be subject to new tariffs are premium
cognacs that cost $38 per liter and higher, and some aircraft
manufacturing parts, both from France and Germany. High-alcohol
wine from Spain and the U.K. weren't added to the latest list.
The USTR said in a regulatory filing that the additional tariffs
target products from France and Germany because the two countries
have provided the greatest levels of subsidies inconsistent with
The U.S. and the EU have been in a long-running dispute over
what each claim are unfair government subsidies to
commercial-aircraft manufacturers: Airbus in Europe and Boeing in
The battle has played out recently in tit-for-tat tariffs on
In October 2019, the U.S. slapped tariffs on products worth $7.5
billion on wine, cheese and other products from Europe. In
retaliation, the EU announced last month tariffs on U.S. products
worth $4 billion, including Boeing jets, spirits nuts and
The USTR said Wednesday in a press release that the latest
addition to its tariff list comes as the U.S. makes adjustments
after the two sides used different reference periods for trade data
to determine products to be covered by the tariffs.
The USTR said that while the U.S. used data for the prior
calendar year, the EU used a period during which commerce was
drastically reduced because of the Covid-19 pandemic.
That allowed Europe to impose tariffs on "substantially more
products" than it would have been able to under the calendar-year
method, the USTR said. After the EU refused to change its approach,
the USTR said it decided to change its own reference period and add
more products. The addition won't change the total $7.5 billion
value of the products affected by the tariffs, the USTR said.
An EU spokesman said the choice of the reference period for the
EU's tariff measures was based on the most recent available trade
data in line with a long-standing WTO practice. The spokesman said
Washington "unilaterally disrupts" the ongoing bilateral
negotiation to find a settlement to the aircraft disputes.
"The EU will engage with the new U.S. administration at the
earliest possible moment to continue these negotiations and find a
lasting solution to the dispute," he said.
The escalation in the tariff fight highlights the challenges in
the trade relationship between the U.S. and the EU, even as
European officials call for improving ties under the incoming
administration. Digital taxes imposed on U.S. tech companies by
France have become a significant cause of tension. The EU's signing
of an investment agreement with China this week has drawn concern
among U.S. trade officials as they seek European cooperation in
The impact of tariffs has been significant. Imports of wine from
France fell 54% during the first five months of this year from a
year earlier, while those from Germany dropped 42%, according to
the US Wine Trade Alliance.
"These tariffs devastate U.S. restaurants and small businesses
at the worst possible time," Ben Aneff, president of the group. "It
underscores how important it will be for President-elect Biden to
quickly repeal the restaurant tariffs, and find ways to more
effectively influence the EU while doing less damage to businesses
here at home."
Write to Yuka Hayashi at email@example.com
(END) Dow Jones Newswires
December 31, 2020 17:29 ET (22:29 GMT)
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