The US has announced it will raise the tariffs on a wide array of products from Europe, including wine and Scotch whisky, by 25% as it retaliates over subsidies given to Airbus.
The World Trade Organisation has ruled that the US can impose the ad valorem tax of 25% on numerous products, from food to machinery, microwave ovens and camera parts, in order to raise US$7.5 billion following subsidies given to aerospace group Airbus by EU members at the expense of US company Boeing.
Announced on Wednesday 2 October, the new tariffs will come into effect on all selected goods landing in the US from 18 October.
The tariffs, which are subject to revision and even being increased, will only remain in place until the $7.5 billion has been recouped, or US and EU negotiators can reach an agreement.
The WTO will also allow EU countries to hit back with their own tariffs in retaliation for the US’s own subsidies to Boeing; the amount is to be decided next year.
The EU has said it is open to finding a settlement rather than engaging in tit-for-tat tariffs but the EU’s trade commissioner, Cecilia Malmström, said in a statement: “Our readiness to find a fair settlement remains unchanged. But if the US decides to impose WTO-authorised countermeasures, it will be pushing the EU into a situation where we will have no other option than to do the same.”
The alcoholic products included in the tariffs cover Scotch and Irish single malt whiskies, various liqueurs and table wines from France, Germany, Spain and the UK not over 14% in alcohol and in containers under two litres.
Wines over 14% have a slight loophole therefore in the new tariffs but are already subject to a higher US tax bracket.
The new tariffs of 25% are far from ideal but at least are not as high as 100% as some of President Trump’s more belligerent social media outpourings had threatened.
Speaking to the drinks business just before the new tariffs were revealed, Maison Louis Latour’s export director, Bruno Pepin, said the company was “concerned” about the tariffs – as the US amounts to 20% of its business – but that they “could live with” a level of around 20-25%.
Although wine was caught up in the dragnet, foodstuffs such as regional meats and cheeses from across the EU were particularly targeted.
“It looks pretty bad. They hit cheese hard,” Ralph Hoffman, vice president of the Cheese Importers Association of America, told the Guardian.