Cognac and more French wines hit with US tariffs

Grape-based spirits like Cognac and Armagnac will join a wider range of French and German still wines subject to 25% US import tariffs, said Office of the US Trade Representative (USTR).

The new tariffs, to be imposed from 12 January, also target aeroplane parts and highlight the ongoing fallout from a US-EU trade dispute over aerospace industry subsidies.

US import tariffs at 25% were imposed in October 2019 on French, German, Spanish and UK still wines at or below 14% abv.

A new list for 25% levies, aimed specifically at France and Germany, includes still wines ‘over 14% abv’ and also spirits ‘obtained by distilling grape wine or grape marc’.

For those two countries, a previous loophole on importing wine in containers above two litres also appeared to have been closed, according to the USTR list.

French wine and spirits export body, FEVS, said exporters could potentially lose more than €1bn in sales in the coming year – if the situation doesn’t change.

It said that, between November 2019 and October 2020, fewer shipments to the US saw wine exporters lose €600m in sales.

The USTR said the expanded tariffs were a proportionate response to the EU introducing $4bn-worth of tariffs on a range of US goods last year.

To get to that amount, USTR said the EU had targeted more products that it should have, because it ‘used trade data from a period in which trade volumes had been drastically reduced due to the horrific effects on the global economy from the Covid-19 virus’.

In the US, retailers, merchants and importers have frequently expressed frustration at wine tariffs.

With Joe Biden set to become US president on 20 January, there was hope that trading relations with the EU could thaw. However, some analysts have said this could take time.

Ben Aneff, president of the US Wine Trade Alliance that has lobbied against tariffs, told Decanter magazine in November that he hoped a Biden administration ‘will recognise that this trade war benefits no one, and that it has been particularly damaging to small, family-owned businesses here in the US’.

Aneff, who is also managing partner at Tribeca Wine Merchants in New York, was among several retailers who told Decanter that wine tariffs had already affected prices and availability.

‘The impact of tariffs has been two-fold,’ said Shaun Bishop, CEO of California-based merchant JJ Buckley, in November 2020. ‘[We’ve seen] both a decrease in product offerings and an increase in prices.’

More news on tariffs:

Will a Biden presidency cut tariffs on EU wine?

China imposes provisional tariffs on Australian wine