Champagne and other sparkling wines from France caught a break in the latest tariff war, at least for now: They were exempt from the 25% taxes that the U.S. now aims to impose on $1.3 billion worth of French luxury goods. Cookware and cheese were also spared from the tariffs, which were announced July 10, but cosmetics, handbags and soap from France will get hit.
The latest tariffs, which will take effect in January 2021, stem from a trade dispute over a 3% digital services tax France is adopting that will affect U.S. tech companies. The six-month delay in implementing the tax on French products may provide time for the two countries to work out their differences, but the controversy has been escalating in the past year.
These taxes are separate from those prompted by a separate trade war between the U.S. and Europe over aircraft subsidies. That has resulted in the U.S slapping a 25% tax on still wines up to 14% alcohol by volume from France, Germany, Spain and the U.K., as well as Scotch whisky, this past October.
What’s more, the U.S. has considered imposing a 100% tax on wine and other products from the European Union. While the U.S. Trade Representative decided against it in February, the tariffs will be reevaluated in August.
The USTR is currently allowing public comments on the tariffs through July 26; a decision on any potential changes to the tariffs is expected to be announced on or about Aug. 12.
The U.S. Wine Trade Alliance encourages every member of the wine trade to take advantage of the opportunity to submit comments. For more, see the USTA’s public comment portal for the WTO/Large Civil Aircraft dispute, which includes all of the current tariffs on wine from the EU, and the original review for the request for public comments.