WASHINGTON – The Trump administration has said it will target more French and German wines and spirits at 25% tariffs starting January 12, in the latest escalation in a tit-for-tat tariff war related to a long-running dispute over subsidies for commercial jet airliners.
Among the new levies, the US will for the first time impose a 25% levy on wine from France and Germany in excess of the 14% alcohol it had previously exempted, according to the Office of the US Trade Representative.
The US has seen this surge in high alcoholic wines, typically from Spain and France, after wine with alcohol of 14% or less the tariff is charged last year.
“Especially with what is happening in light of the pandemic, with the closure of restaurants and refineries, this is not the right time to enter an industry that is already facing economic impact,” Christine LoCascio, head of public policy for the US Council’s Distilled Spirits, said Thursday.
Washington imposed a 25% tariff on wines from France, Spain, Germany and the UK in October 2019 in retaliation for subsidies they made to European aircraft manufacturers.
SE, arguing they were hurt
Other items that will be subject to the new tariffs are premium cognacs priced at $ 38 per liter and up, and some aircraft-building parts, both from France and Germany. High alcoholic wines from Spain and England are not added to the latest list.
USTR said in its regulatory filing that the additional tariffs targeted products from France and Germany because the two countries had provided the largest levels of subsidies that were incompatible with WTO rules.
The US and EU have long been at odds over what each claims are unfair government subsidies to commercial aircraft manufacturers: Airbus in Europe and Boeing in the US
A battle has recently occurred over tit-for-tat tariffs on consumer products.
“These tariffs are destroying US restaurants and small businesses at the worst of times.”
In October 2019, the US imposed tariffs on $ 7.5 billion worth of products for wine, cheese and other products from Europe. In retaliation, the European Union announced tariffs last month on $ 4 billion worth of US products, including Boeing jets, alcoholic beverages, and tobacco.
USTR said Wednesday in a press release that the latest additions to its tariff list came as the US made adjustments after the two sides used different reference periods for trade data to determine which products the tariffs would cover.
USTR said that while the US used data for the previous calendar year, the EU was using a period in which trade was drastically reduced due to the Covid-19 pandemic.
That allows Europe to impose tariffs on “substantially more product” than it could do under the calendar year method, the USTR said. After the EU refused to change its approach, USTR said it decided to change its own reference period and add more products. The additions will not change the total value of the $ 7.5 billion worth of products subject to tariffs, USTR said.
An EU spokesman said the choice of reference period for EU tariff measures was based on the latest available trade data in line with long-standing WTO practices. The spokesman said Washington was “unilaterally disrupting” ongoing bilateral negotiations to find a resolution to the plane dispute.
“The European Union will engage with the new US administration as soon as possible to continue these negotiations and find a lasting solution to the dispute,” he said.
The escalation in the tariff fight highlights challenges in trade relations between the US and the EU, even as European officials call for improving ties under the upcoming administration. The digital tax imposed on US technology companies by France has been a significant cause of tension. European Union signing of an investment agreement with China This week has attracted attention among US trade officials as they seek European cooperation against China.
The tariff impact is very significant. Wine imports from France fell 54% in the first five months of 2020 from a year earlier, while those from Germany fell 42%, according to the US Wine Trade Alliance.
“These tariffs are destroying US restaurants and small businesses at the worst of times,” Ben Aneff, group president. “This underscores how important it is for President-elect Biden to immediately lift restaurant tariffs, and find ways to more effectively influence the EU while reducing damage to businesses at home.”
Write to Yuka Hayashi on [email protected]
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