Wine industry dismayed at U.S. decision to continue 25% tariffs

Published 9:04 am Thursday, August 13, 2020

The U.S. will keep a 25% tariff on European wines imposed in October , the U.S. Trade Representative announced Wednesday.

The decision shocked American wine industry leaders, who over the past 10 months have sent more than 24,000 comments to the USTR and over 42,700 letters to Congress seeing an end to the tariffs. Fourteen senators and 164 representatives had also called for an end to the tariffs.

At first glance, industry leaders say, it may seem that a duty on European wines would help domestic producers and scrub out foreign competition. But American wine producers say the import tax has damaged overall wine-drinking culture and put some distributors out of business.

“I’m surprised and disappointed. Why is the USTR ignoring us? A spectacular failure in judgment is the only thing I could say. At the very least, they sure seem to be indifferent to the staggering harm they’re causing the U.S. wine industry,” Ben Aneff, president of the U.S. Wine Trade Alliance, told the Capital Press.

In a statement Wednesday, the Wine & Spirits Wholesalers of America criticized the decision, saying tariff relief is desperately needed during the pandemic.

In October the U.S. imposed the 25% tariff on wines from France, Spain, Germany and UK as part of U.S. retaliation against the European Union in response to subsidies it gives to Airbus, a European aerospace company.

Wine industry leaders across the nation, including Jana McKamey, executive director of the Oregon Winemakers Association, have told the Capital Press for months that it is inappropriate — and ineffective — for the USTR to use wine as a “retaliatory pawn” for unrelated industries.

The industry has been spared additional threatened tariffs — such as a 100% tariff in January and another tariff on French sparkling wine in July — and each victory was followed by a celebration. But this 25% tariff has remained in place since October 2019, and winemakers aren’t celebrating the decision this time.

The tariff, wine leaders say, has disproportionately hurt U.S. businesses and winemakers more than the European targets they were intended to harm.

Aneff, of the U.S. Wine Trade Alliance, said industry data calculated over the past several months nationwide show that for every dollar of damage done in Europe, these tariffs have inflicted $4.50 of harm on U.S. businesses.

What’s more, Aneff said, European winemakers simply shifted markets and exported more of their high-demand wines to Asia and other parts of the world.

“The tariff on wine has utterly failed to punish European firms,” he said.

Direct U.S. importers have been hit hardest, but industry leaders from winegrowers’ associations in Oregon, Washington and California say a whole web of businesses have been hurt: vineyards, wineries, restaurants and bars, retailers, manufacturers, hospitality businesses and transportation industries.

Although wine industry leaders are frustrated with Wednesday’s decision, many are calling for an even bigger flood of letters to lawmakers and the USTR demanding change.

“We will not stay quiet,” said Aneff.

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