Tariffs on Wine, Food From Europe to Stay for Now, U.S. Says

Date: Tuesday, February 16, 2021
Source: Wall Street Journal

WASHINGTON—The Biden administration says it won’t be ending tariffs on imported European wine, cheese and other food imports any time soon—to the dismay of industry groups who say the levies are hurting U.S. restaurants and consumers.

The Office of the U.S. Trade Representative said Friday it was unnecessary for now to suspend the levies, which were imposed by the Trump administration as part of a longstanding dispute with the European Union over commercial aircraft subsidies.

In a regulatory filing, the USTR said it would “continue to consider the action taken in the investigation,” referring to a 17-year-old dispute over how governments subsidize Boeing Co. and Airbus SE. The Biden administration has said it is reviewing the tariffs and other major trade policy actions adopted by the previous administration.

Under the Trump administration, the dispute turned into a tariff fight that snared food and beverage industries unrelated to aircraft manufacturing. Washington imposed tariffs on $7.5 billion worth of European wine and food items like cheese and olives in late 2019.

The European Union hit back with levies on U.S. whiskey, nuts and tobacco valued around $4.5 billion. The U.S. stepped up the sanctions on Dec. 31 with additional tariffs, placing virtually all wine imports from France and Germany under its 25% tariff.

The decision to maintain the status quo came despite intense lobbying by the U.S. restaurant and beverage industries that are already reeling from the impact of the Covid-19 pandemic.

“These food and wine tariffs are impacting one of the most vulnerable sections of the economy at the worst point in generations,” said Ben Aneff, president of the U.S. Wine Trade Alliance, a group representing wine importers.

Wine represents the largest source of profit for many restaurants, he said, and more than 80% of the burden of the tariffs are absorbed by the U.S. businesses and consumers, rather than by European wine producers.

A group of celebrity chefs have sent a letter to congressional leaders asking to end what they call “restaurant tariffs,” with signatures from 2,300 restaurant owners across the country.

The USTR said in Friday’s filing that the affected U.S. industry has been consulted before the latest decision, which came as a result of a previously scheduled periodic review of the measure. Representatives of the USTR and the EU office in Washington didn’t respond to requests for comment.

European officials have called on the Biden administration in recent weeks to help resolve the aircraft dispute but significant differences have remained between the two sides.


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