Oppose the tariff on European wine

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Michael Dupuy
Michael Dupuy signed this petition

If the U.S. government follows through with its threat to impose 100% tariffs on all wines from the European Union, both retailers and consumers will be paying huge price increases on wine. Streetcar will forward this petition to the Office of U.S. Trade Representative to demand that our administration choose an alternate method of negotiating with our European allies.

Background:

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. They only issued a 10% tariff on Airbus itself! It is our understanding that now a 100-percent 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 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 could result in a 50-percent increase and a 100-percent tariff on wine imports could result in a 150-percent increase in prices for consumers.

There is no substitute for wines imported from the EU. Most of the world's most historic and revered wine regions are in EU countries, and the majority of wine produced globally comes from the EU. It would impossible to replace these wines outright, and the increase in demand from other wine regions would logically raise prices on those wines, as well.

If a 100% tariff were to go into effect in January for even a short time, the impact would be immediate, as EU producers would seek other markets for their current vintages, leaving future US allocations in doubt. Importers are likely to struggle to pass along some of the more expensive wine while searching for alternate sources, which doesn't happen quickly. Undoubtedly, businesses up and down the supply chain would fail. 

Bottom line:

Why should individual consumers, retailers, importers, and the millions of U.S. citizens working in the wine industry suffer because of a dispute involving Boeing and Airbus or France’s digital services tax?