Despite considerable opposition, the U.S. Trade Representative (USTR) on Aug. 12 decided to keep the 25% tariffs on European goods that it implemented this past October. The tax on certain EU wines, cordials and whiskeys stem from an ongoing World Trade Organization Airbus/Boeing dispute.
The USTR at least declined—for now—to impose more tariffs on more goods from Europe, such as vodka, gin and beer. But the outlook is grim if the aircraft dispute is not resolved soon.
The Distilled Spirits Council of the U.S. (DISCUS) noted in a statement that the EU may impose retaliatory tariffs this fall on U.S. rum, vodka and brandy in its parallel case at the WTO concerning Boeing. The EU is also scheduled to increase its retaliatory tariff on American whiskey from 25% to 50% next spring 2021.
The USTR, which reviews the tariff level and list of impacted products every 180 days, had been considering imposing a 100% tax on wine and other products from the EU earlier this year.
The tariffs the U.S. has imposed punish a number of sectors unrelated to aviation, including the hospitality industry already reeling from COVD-19. A recent study by The Wine & Spirits Wholesalers of America (WSWA) found that the 25% tariff could result in the U.S. beverage alcohol industry losing nearly 93,000 jobs and more than $3.8 billion in wages, costing the U.S. economy more than $11 billion in 2020.
In response to the USTA’s decision Ben Aneff, president of the U.S. Wine Trade Alliance, said that wine tariffs have no place in a dispute between Europe and the U.S. over aircraft subsidies. “The tariff on wine has utterly failed to punish European firms,” Aneff said in a statement on Aug. 12. “For every dollar of damage in Europe, these tariffs inflict $4.50 of harm on U.S. businesses.”
