A couple of weeks ago, I penned my usual monthly column for Jancis Robinson, focusing on the dire threat to the US wine industry posed by a set of proposed tariffs on European wine. That article covered a hearing in Washington, DC in which many members of the wine industry spoke with passion and conviction about the damage the proposed tariffs would do to their livelihoods and the industry in general.
Eight days after that article was published, news broke that Trump and Macron had reached something of a detente, and that the tariff question was postponed to at least 2021.
There was a huge sigh of relief around the world, and both the news media and members of the wine industry began to publish stories and social media posts about how the wine industry dodged a bullet, and how we can now rest easy.
There’s only one problem. All those people are dead wrong.
You see, there are two tariff disputes in existence between the USA and the EU.
Dispute #1 — An objection to the DST Digital Services Tax that France has imposed on Google, Amazon, Facebook etc. In response to this, Trump and the Office of the US Trade Representative threatened up to 100% Tariffs on a bunch of things including French sparkling wine, handbags, etc.
Dispute #2 — An objection to the long-standing illegal Airbus subsidies in Europe. A 25% tariff in response to this dispute was already imposed in October on all European wines under 14% alcohol (but not Champagne, sparkling wines, Hungarian Tokaj or Italian wine. Sales of imported wine immediately fell off a cliff. On top of those 25% tariffs already imposed, the Trump administration recently proposed an additional 100% tariff on ALL European wines no matter the alcohol level.
It’s vitally important that everyone in the wine world understand: when the news broke that Trump and Macron had agreed to a de-escalation and postponement of the tariff it that agreement ONLY covered Dispute #1 above.
Dispute #2 is still very much a threat. A really big threat. No agreement has been reached regarding that dispute, and frankly, of the two tariffs contemplated by this administration, it’s this second tariff that would be truly devastating one that will crush the industry. It can be applied and in force as soon as mid-February.
The hearing I wrote about in my column covered only the first dispute, which is why if you read that article, the committee constantly had to redirect the peopel testifying to focus on Champagne, as that was the subject of the tariff under discussion. But presenter after presenter from the wine world couldn’t help themselves from expressing the true danger they feared: the second tariff.
And that second tariff is still a threat. We didn’t dodge a bullet. In fact, the barrel of the gun is still resting against our temple. And the scary thing is that we really have no idea what the man holding that gun is going to do.
Which is why we all need to be continuing to pressure our representatives, and in particular our senators (despite their current distractions) to push hard against this proposed trade action.
How can you help? By calling your members of congress and senators.
You should say that you are calling to warn them of the disastrous loss of small businesses and thousands of jobs that the current Section 301 Airbus Dispute threatens by proposing a 100% tariff on European wines. If levied, this tariff will shut down hundreds of importers, distributors, and retailers, resulting in loss of jobs and loss of valuable state tax revenues.
We are not nearly out of the woods yet, friends. That’s despite news this morning that Airbus is planning to settle the bribery charges against it. And we all need to keep up the pressure on our government. Thank you for whatever you can do to help.