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Dismay in Burgundy and New York as US keeps wine tariffs

Some European wines may become harder to find in the US after officials chose to maintain higher import taxes as part of a multi-billion-dollar trade dispute with the EU over aerospace industry subsidies.

A 25% import tariff on still wines at 14% abv or below from France, Spain, Germany and also the UK will continue, said the Office of the US Trade Representative (USTR) last night (12 August).

Winemakers, importers and retailers had hoped for a reprieve in a review of the tariffs first imposed on 18 October 2019 – part of US retaliation for illegal EU subsidies paid to the Airbus manufacturer.

‘It’s a big disappointment,’ said Thiébault Huber, president of the confederation of Burgundy appellations and winemakers (CAVB). ‘With the tariffs and Covid-19 it’s a catastrophe for us,’ he told Decanter.com.

‘The US is the biggest market in the world for Bourgogne wines.’

American imports of French still wines fell by 35% in the first eight months of the tariffs, to the end of June, according to France’s wine and spirits export body, FEVS.

That amounts to nearly €415m ($500m) in lost sales, said the group today (13 August), adding that it ‘regrets’ the US decision to retain the tariffs. It called on politicians on both sides to find a resolution.

‘We will not stay quiet’

US wine importers, retailers and restaurants were also being damaged by the tariffs, said Ben Aneff, president of the US Wine Trade Alliance that has lobbied hard to get the taxes removed.

‘With this decision, the USTR has delivered a blow to American wine businesses and restaurants,’ he said.

‘But we will not stay quiet. It is now clear, the USTR is utterly failing in their job to appropriately weigh the damage to US businesses when applying tariffs.’

Aneff, who is managing partner at New York-based Tribeca Wine Merchants, also accused trade officials of ignoring ‘a massive outpouring of public concern’.

He said, ‘Tens of thousands of Americans wrote the USTR to outline the economic devastation these tariffs cause US businesses, and to demand the removal of these tariffs, one of the single largest responses USTR has ever received.’

He added, ‘Fourteen Senators and 164 Members of Congress from every political persuasion came together calling for an end to these tariffs.’

‘New process’ to reach a deal

Both the EU and US have said they remain committed to reaching an agreement in the aerospace trade dispute.

The US has imposed retaliatory tariffs worth $7.5bn on EU products, from wine to olives and cheese, with approval from the World Trade Organisation (WTO).

Robert Lighthizer, the US trade representative, said last night, ‘The EU and member states have not taken the actions necessary to come into compliance with WTO decisions.’

He did, however, say that a ‘new process’ will begin with the EU to find a settlement.

In Burgundy, Huber said that winemakers in the region and across France have asked for compensation and support at EU level.

Some regions and styles have not been hit by the tariffs, such as Italian wines and also sparkling wines.

See also: 

Champagne avoids US tariffs over French digital tax

US officials step back from 100% tariffs

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