Time to oppose looming wine tariffs

Attention all wine lovers: There’s still time to voice objections to a Trump administration proposal to levy a 100 percent tariff on all European wines and a variety of other food and beverage products, including a wide range of cheeses. But the deadline is fast approaching.

In case you’ve been too busy enjoying your wines to follow the news, the threatened tariffs are the result of a long-running trade dispute between the U.S. and the European Union over subsidies given to the European aerospace company Airbus. The World Trade Organization decided that the subsidies were illegal and granted the U.S. the authority to slap tariffs on $7.5 billion in European goods. (There’s a separate dispute related to a French digital services tax that could also result in increased tariffs on Champagne and other products.)

Make no mistake: Despite how President Trump likes to characterize tariffs as payments made by other countries, they are actually taxes on American consumers. The tariff is charged to the company that imports the product, and that company passes the increase (or most of it) down the line, with the consumer ultimately paying. That $20 Italian red you’re so fond of? Watch the price climb to $40 or more. Or it could simply disappear from store shelves because it’s no longer marketable.

But consumers aren’t the only ones who will be hurt. There are scores of importers who bring these wines to our shores. If the wines become too expensive for the average consumer, the companies will no longer import them. Their businesses will dry up. And there’s a downstream effect, too, with impacts on distributors, trucking companies, restaurants and retail shops. Industry groups have estimated that tens of thousands of U.S. jobs could be jeopardized.

And the wine won’t easily start flowing again if the tariffs are eliminated at some point. If U.S. importers curtail their purchases, European producers will need to find other markets, and many wines may never be available here again.

In the Airbus dispute, tariffs of 25 percent were imposed in October on a smaller range of wines and other food products. Consumers haven’t been affected too much, because many of the wines currently being sold were purchased by importers before the tariffs kicked in. In other cases, the increase has been absorbed by producers and importers. That simply won’t be possible if tariffs climb to 100 percent. In the meantime, many importers report that they are working with their wineries to get as much stock as possible now, in case the higher tariffs are levied.

At first glance, it might appear that this would be a boon for U.S. wineries. But the industry is pretty much united in opposition. The Wine Institute, which represents the California wine industry, issued a statement in October, before the first tariffs were imposed, taking exception to the targeting of wine in a dispute that’s about an unrelated product and warning of retaliation by Europe against U.S. wines. Industry groups are also concerned about negative effects on distributors, restaurants and retailers.

The comment period in the Airbus case ends Jan. 13. You can contact your member of Congress, or you can submit comments directly to the U.S. Trade Representative by clicking here.

 

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