Many wine lovers hope that regime change in the US will bring an end to the punishing 25 percent tariffs currently being slapped on most French, German and Spanish wines.
That might happen, eventually. But don’t look for action soon. If anything, it’s possible that the US will put tariffs on even more European wines while the Trump administration is still in charge. And those tariffs won’t magically disappear from the US government on January 20, 2021, even if Trump himself does.
It takes two sides to fight a war, and the European Union fired its own salvo last week, after being authorized by the World Trade Organization to impose tariffs on $4 billion in US goods. The EU did not impose tariffs on most US wine, but it did slap 25 percent tariffs on rum, vodka, brandy and vermouth from the US. The EU already has a 25 percent tariff on American whiskey.
“I was really disappointed,” said Ben Aneff, president of the US Wine Trade Alliance. “I was certainly hoping that [the EU] would wait for the Biden transition to put their team in place and to begin negotiations around this issue. I think it’s very possible that the USTR [US Trade Representative] will respond with retaliatory tariffs shortly. We’re hopeful that they will leave wine out of this. At this point they should have a full understanding that tariffs do absolutely nothing whatsoever to influence the EU. The current tariffs on European wine have been an absolute failure in terms of influencing European policy. I hope they’ll focus on something more effective.”
The trade war between the US and EU goes all the way back to 2005, when both sides complained to the WTO that the other was subsidizing commercial aircraft production – Boeing in the US, Airbus in Europe. It ticked along for more than a decade without significantly affecting US-EU relations until Donald Trump took the White House and decided that yesterday’s international enemies were his friends, and vice versa.
EU leaders probably breathed a sigh of relief, and perhaps opened a bottle of bubbly or two, when Trump was defeated in the US presidential election. President-elect Joe Biden was known for his foreign policy expertise when he was still a US Senator; it’s one reason Barack Obama asked him to be Vice President. It’s a near certainty that US-EU relations will improve immensely as soon as Biden walks through the rings of security gates that now surround the White House and takes occupancy.
But good EU-US relations don’t mean an easing of tariffs. Aneff says Biden simply will not have time to make changes to the USTR before February, the next time it is scheduled to review the existing trade-war tariff schedule.
“With respect to the current tariffs on wine, we have to be clearheaded here,” Aneff told Wine-Searcher. “We’re still going to be in the middle of the civil aircraft dispute. The Biden administration is not likely to have a new USTR representative by the time the next [deadline to examine tariffs] rolls around again. His cabinet will not have been approved. Our job will be to tell the Biden administration why these tariffs should be a priority in the first 60 to 90 days of his administration. There will likely not be new leadership at USTR to make these decisions. We’re going to have to go to the Biden administration and make the pitch that eliminating these tariffs is good for America.”