detail of "The Garden of Earthly Delights" by Hieronymous Bosch, c. 1490-1510, Prado, Madrid

Tariffs - are you ok with paying double for your wine?

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I love December in the wine shop – it’s extra busy, and it’s a lot of fun. But there’s a shadow hanging over this holiday season for all wine lovers: the very good possibility that our government will apply tariffs to wine from all EU countries, simultaneously increasing the existing tariffs (currently imposed on French, Spanish, and German wine) to 100% of the importer’s cost (or 100% of your cost if you buy some bottles on holiday in Rome and bring them home with you)*. This is so disastrous that the consequences are hard to wrap my head around, but it looks life-threatening. David Lillie and I have spent 18 years building our business, and it could get wiped out in one blow; for better or worse we’ve tied our love of European wine to the life of our shop.  We have 25 employees, many with families; we pay their health insurance; we pay a boatload of taxes. Chambers Street Wines is a micro business, but there are many thousands of employees and owners around the country who will be similarly affected – to say nothing of how this will impact our wine loving customers.

We are told again and again that the number of citizens heard from matters to those who make such decisions. Whatever you think in general regarding the strategy and motivation behind the imposition of tariffs, we hope you will join us in pushing back against the imposition of 100% tariffs on wine.* Please follow the links below to send messages to the decision makers involved.

*almost all consumer goods produced in the EU will be subject to the new tariffs. Like me you may not consume much in the way of leather goods, but we eat a lot of olive oil, pasta, cheese….

Below are links to prepared statements that you can easily send - but of course feel free to create your own diatribe! Thank you for taking the time. We'll keep our fingers crossed. Jamie Wolff & David Lillie

Click here to email your Senator

Click here to email your Representative

Perhaps even more important - and only slightly more demanding - is to email the US Trade Representative.

WRITE THE U.S. TRADE REPRESENTATIVE

Below in italics is wording for a letter that you can use to write to the U.S. Trade Representative at the website (link above) they have created to take input on proposed tariffs. Copy the italicized wording, click on the link above, then paste the wording into the box provided for writing commentary. Remember to put your name and address in the area reserved for them.

The Honorable Robert Lighthizer

U.S. Trade Representative

Executive Office of the President

600 17th Street, NW

Washington, DC 20006

 

                        Re: Opposition to Tariffs on Imported Wine from the European Union

Dear Amb. Lighthizer:

I am writing as a customer and consumer of imported and domestic wines who is concerned with the multiple rounds of tariffs that are being imposed and considered on wine from the European Union (“EU”).  I strongly urge you not to punish me, or my fellow wine lovers, or hardworking wine importers and retailers for problems we didn’t cause. It’s unfair at face value. You should punish those responsible. Punishing Airbus and their suppliers and French digital services companies would be much more effective, as well as fair. 

Beginning on October 18, 2019, the U.S. Government imposed a 25-percent tariff on certain French wine as part of retaliatory tariffs against the European Union (“EU”) after the World Trade Organization authorized retaliation for the EU’s failure to comply with WTO rulings on subsidies provided to Airbus. All the while Airbus itself was only issued a 10% tariff. I understand that a 100% tariff is proposed on French sparkling wine (consisting mostly of Champagne) and that this tariff is part of the Section 301 duties imposed on imports from France as a result of the country’s Digital Services Tax (“DST”). Finally, on December 10, 2019, USTR proposed imposing tariffs of up to 100 percent on all wines from the EU. 

Because of these import tariffs, the prices will go up dramatically for wine. Margins on wine are extremely small, and the sale of wine is highly regulated, with virtually every state imposing a three-tier distribution system with markups occurring at each tier of distribution.  Thus, a 25-percent tariff on wine imports will likely result in a 50-percent increase and a 100-percent tariff on wine imports will likely result in a 150-percent increase in prices for a consumer like me.

There is no substitute for imports of wine from the EU. Wines from the EU are different from domestic wines and wines from other countries as a matter of consumer taste.  In addition, because it takes many years to plant new grape vineyards and allow the vineyards to produce mature fruit that can be harvested to make wine, it will take at least a decade before the U.S. domestic wine industry could ever be in a position to begin replacing wine imports from the EU.

As a wine consumer, I do not understand why individual consumers like me should suffer because of a dispute involving Boeing and Airbus or France’s digital services tax.  Retaliatory tariffs on these matters should target Airbus and their suppliers who benefitted from the subsidies or French digital services companies.