Trump Administration Announces New Duties On French Wine, Scotch Whisky

By Neat Pour Staff |

President Trump’s trade wars continued to hammer the already battered alcohol sector on Thursday (10.03). After receiving an okay from the World Trade Organization (WTO), Washington announced new duties of 10% and 25% on European imports including Scotch whisky and French wine.

Scheduled to kick in on October 18, the sanctioned duties (a duty is like a tariff, but more of an indirect tax passed onto the consumer) outlined by the USTR) are the culmination of a multi-decade battle over Euro plane manufacturer Airbus’ shady business practices.

Accordingly, the roster of targeted goods begins with aerospace components. Then, the list goes after the palate. All sorts of cheeses including Stilton, Colby, and Gouda are on the roster. So, are dozens of seafood items, especially shellfish. Yogurt? Check.

However beverages are particularly targeted. Waters (including ice) and most fruit juice lead off the section. All sparkling wines made from grapes are included as are most other wines, but particularly those with an ABV in excess of 14%. For good measure, all liqueurs and brandies fall under the proposed duties.

Scroll down to the end of the article for the full list.

The move was condemned by most major trade groups including American Distilled Spirits Association (ADSA), American Craft Spirits Association (ACSA), National Association of Beverage Importers (NABI), Wine & Spirits Wholesalers of America (WSWA), and Distilled Spirits Council of the United States (DSCUS).

DSCUS President and CEO Chris Swonger described the duties as a “devastating blow to the U.S. spirits industry.”

“While we recognize the U.S. and EU are trying to solve long standing trade disputes, distillers on both sides of the Atlantic have become collateral damage in matters that are completely unrelated to our industry,” said Swonger in a statement. “As the important holiday season approaches, we urgently call upon the U.S. and the EU governments to get back to the negotiating table and return to tariff free trade with our largest export market.”

To understand the dispute, one must look back to 2004. Back then, the US. filed a complaint with the World Trade Organization alleging that EU member states, France, Germany, Spain, and the United Kingdom, provided launch subsidies to Airbus allowing the company to gain an unfair edge over Boeing. After seven years of investigation and bureaucracy, the WTO sided with the US., ruling that EU provided Airbus $18 billion in subsidized financing from 1968 to 2006.

Despite the ruling, the EU took only token actions to correct the matter. By 2012, the US was back at the WTO requesting a compliance panel to force action from the Europeans. After another six years of legal wrangling, the WTO ruled for the US in March 2018. 

The US subsequently requested authorization to impose some $11.2 billion per year in countermeasures. The EU quickly challenged this figure kicking the decision on the exact sum back to WTO moderation.

This week, the WTO ruled in favor of the US. Coincidentally, the tariff loving Trumpians took the liberty of preparing a list of items to tax in advance. 

“For years, Europe has been providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers. Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU’s illegal subsidies,” U.S. Trade Representative Robert Lighthizer said in a statement. “Accordingly, the United States will begin applying WTO-approved tariffs on certain EU goods beginning October 18. We expect to enter into negotiations with the European Union aimed at resolving this issue in a way that will benefit American workers.”

The affected beverage items follow. You can see the entire list here.

  • Pear juice, concentrated or not concentrated
  • Prune juice, concentrated or not concentrated
  • Juice of any single vegetable, other than tomato, concentrated or not concentrated
  • Waters (incl. ice, snow and steam), ot/than mineral waters or aerated waters, not cont. added sugar or other sweetening matter nor flavored Nonalcoholic beer
  • Chocolate milk drink
  • Juice of any single fruit or vegetable (except orange juice) fortified with vitamins or minerals, in nonconcentrated form
  • Fruit or vegetable juices, fortified with vitamins or minerals, mixtures of juices in non-concentrated form
  • Sparkling wine, made from grapes
  • Effervescent grape wine, in containers holding 2 liters or less
  • Tokay wine (not carbonated) not over 14% alcohol, in containers not over 2 liters
  • Wine other than Tokay (not carbonated), not over 14% alcohol, in containers not over 2 liters
  • “Marsala” wine, over 14% vol. alcohol, in containers holding 2 liters or less
  • Grape wine, other than “Marsala”, not sparkling or effervescent, over 14% vol. alcohol, in containers holding 2 liters or less
  • Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume <=14% in containers holding over 2 liters but not over 4 liters
  • Wine of fresh grapes, other than sparkling wine, of an alcoholic
  • strength by volume >14% in containers holding over 2 liters but not over 4 liters
  • Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume <=14% in containers holding over 4 liters but not over 10 liters
  • Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume >14% in containers holding over 4 liters but not over 10 liters
  • Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume <=14% in containers holding >10 liters
  • Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume >14% in containers holding >10 liters
  • Grape must, nesoi, in fermentation or with fermentation arrested otherwise than by addition of alcohol
  • Grape brandy, excluding pisco and singani, in containers not over 4 liters, not over $2.38/liter
  • Grape brandy, excluding pisco and singani, in containers not over 4 liters, valued over $2.38 to $3.43/liter
  • Grape brandy, excluding pisco and singani, in containers not over 4 liters, valued over $3.43/liter
  • Grape brandy, excluding pisco and singani, in containers over 4 liters, not over $2.38/liter
  • Grape brandy, excluding pisco and singani, in containers over 4 liters, over $2.38/liter
  • Liqueurs and cordials

More of Neat Pour’s coverage of the trade wars and tariffs can be found here.

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