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United States conducts review of existing tariffs on European wines
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Wine business

United States conducts review of existing tariffs on European wines

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The Office of the United States Trade Representative in the coming weeks will review the status of an existing 25% tariff on wines imported from the European Union. Trade associations - the Napa Valley Vintners included - say the tariffs hinder the progress of wine growing regions internationally, and that they hurt American businesses and consumers. 

The American wine industry is expected to continue to voice its opposition to tariffs on European wine in coming weeks as the Office of the United States Trade Representative (USTR) undertakes a review on the duties.

Imported European wine is presently subject to a 25% tariff, part of a series of tariffs approved in October of last year by the World Trade Organization in retaliation for the European Union’s illegal subsidization of Airbus, an airplane manufacturer. (The United States has said the subsidies greatly disadvantaged the American aerospace industry.)

Wines more than 14% alcohol by volume or stored in containers larger than two liters are exempt from the tariffs.

It’s not uncommon for luxury items like wine to wind up in the middle of trade disputes; China, for example, levied mounting tariffs on American wine as the trade war between the two nations has raged on.

The Trump Administration’s decision to place tariffs on European wine, thought of especially in regions like Italy and France as culturally significant, serves also as a targeted rebuke, industry members say. But stakeholders add that though the tariffs were meant to punish foreign wine industries, they have harmed American businesses and consumers, too. EU wines are now significantly more expensive to import and distribute.

The USTR is legally required to reconsider existing tariffs every few months and began accepting public comments regarding the tariffs on Friday. At the last review, in February, the wine industry emerged unscathed, though the USTR raised tariffs on “large European aircraft” to 15%, up from 10%.

The office of the USTR announced it was requesting comments from the public regarding which products should remain subject to tariffs, and whether or not “the rate of additional (tariffs) on specific products should be increased, up to a level of 100 percent” among other things, according to the USTR.

The Napa Valley Vintners (NVV) has continually made the elimination of tariffs one of its highest priorities, according to Vice President of Industry Relations Rex Stults. The group has taken two trips to Washington D.C. within the last nine months to speak with legislators about the adverse impact of tariffs, Stults said.

Vintner representatives have also worked closely with the Wine Origins Alliance, an international association of more than 30 wine growing regions, in hopes of combating the tariffs.

NVV plans to submit its own comments in coming weeks, Stults said, calling tariffs “an artificial barrier” for the industry.

“The message is that we would like to compete (with other wine regions) on an even playing field – ideally a zero-for-zero tariff basis,” he said. “These tariffs don’t only hurt the regions they’ve been applied to: they hurt American importers and businesses bringing those wines in.”

As of mid-day Friday, almost 30 comments had been submitted – many emphasizing concern over additional tariffs on wine.

“Any additional tariffs on wine… would be the proverbial ‘third strike’... on business,” one commenter wrote, referring to the adverse impacts of the first wave of tariffs and the coronavirus pandemic. He and his wife had owned a wine import and distribution business for more than 20 years, he wrote, and deal mostly in French wines.

Individuals interested in leaving comments can do so at comments.ustr.gov/s/.

You can reach Sarah Klearman at (707) 256-2213 or sklearman@napanews.com.

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Wine Industry Reporter

Wine industry reporter at the Napa Valley Register.

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