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French wineries to get aid as new US tariffs bite

More French and German wines have been hit with retaliatory US import tariffs this week, as France’s government promises fresh aid for winemakers and an alliance of American retailers and merchants looks to president-elect Joe Biden to solve the impasse.

US trade officials pressed ahead with plans to impose a 25% import tariff on French and German still wines above 14% abv this week.

Cognac and other grape-based spirits from France and Germany were also targeted, as part of an expansion of products targeted in the long-running US-EU trade dispute over aerospace industry subsidies.

The latest move comes in the final days of the Trump administration and adds to the 25% import tariff imposed in October 2019 on still wines from France, Germany, Spain and UK at 14% abv or less, and shipped in containers up to two litres.

Since then, some US merchants and retailers have noted lower availability and higher prices for some European wines.

In France, finance minister Bruno Le Maire told a news conference on Thursday (14 January) that winemakers hit by tariffs would be able to get up to €200,000 per month in extra aid if they had lost 50% of their revenue, reported Reuters.

Fewer shipments to the US saw French wine and spirits exporters lose €600m in sales between October 2019 and November 2020, trade body FEVS said earlier this month.

Across the Atlantic, lobbying group the US Wine Trade Alliance has called for president-elect Joe Biden to take action to resolve the dispute.

‘We’re hopeful that the 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,’ Ben Aneff, president of the Alliance, told Decanter before the extra tariffs were brought in.

However, economic experts have also observed that, while the Biden team has spoken of warmer relations with the EU, there are many immediate challenges facing the incoming administration – especially the Covid-19 crisis.

In a note to members earlier this month, Aneff said it was important to convince the Biden administration not to wait on tariffs. He said repealing the levies could bring some relief to restaurants and the trade more broadly.

The president of the California-based Wine Institute, Bobby Koch, has also called this month for an end to the tariffs.

‘This dispute has absolutely nothing to do with wine and we call on the US and EU to urgently redouble their efforts to reach an agreement that removes these harmful tariffs,’ he said.

US officials have imposed the tariffs as part of $7.5bn of levies on EU imports, endorsed by the World Trade Organisation (WTO) after the EU was judged to have paid illegal subsidies to the Airbus group. In a parallel case brought by the EU against American group Boeing, European officials imposed $4bn of tariffs on US imports late last year, but excluded wine.

Both sides have said they wish to find a resolution.

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