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EU wine threatened by extra US tariffs

US trade officials have threatened to add extra import taxes on to European Union wines, from Champagne to Barolo, as part of a dispute with the EU at the World Trade Organisation over subsidies for the aerospace industry.

A preliminary 14-page product list, released by the office of the United States Trade Representative (USTR) this week, contains 12 separate categories of wine targeted by the proposed tariffs.

Those cover all sparkling wines made from grapes, as well as wines both below and above 14%abv and also grape brandy.

Container size was also specified, ranging from those holding two litres or less, between four and 10 litres and those above 10 litres.

If implemented, additional tariffs would be applied to products from any of the current 28 member States of the European Union.

Other EU products under threat include cheddar cheese, swordfish steaks, motorbikes, aircraft and olive oil, said the USTR.

Its move comes in response to a dispute over EU subsidies to European aeroplane manufacturer Airbus. The USTR said that these have caused ‘adverse effects to the United States’ and that the EU has failed to abide by a World Trade Organisation (WTO) ruling on the issue.

The US estimates the harm from EU subsidies to be worth US$11 billion in trade each year – an amount currently subject to arbitration at the WTO with a verdict expected in the summer.

A WTO ruling in May 2018 stated Airbus received illegal funding for the launch of its A380 superjumbo and A350 jetline, costing US aerospace manufacturers ‘tens of billions of dollars in lost sales’, said US trade representative Robert Lighthizer at the time.

This week, Lighthizer said, ‘This [Airbus] case has been in litigation for 14 years, and the time has come for action. The Administration is preparing to respond immediately when the WTO issues its finding on the value of US countermeasures.

‘Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft. When the EU ends these harmful subsidies, the additional US duties imposed in response can be lifted.’

The current list of EU products to be targeted is preliminary and a final version is expected once the WTO has issued its report on the value of countermeasures.

EU member states exported wine worth €11.3bn beyond EU borders in 2017, with the US accounting for around one third of that total, according to European Commission figures published in November 2018.

Editing by Chris Mercer.

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